You are here: HomeNews2012 01 26Article 228583

General News of Thursday, 26 January 2012

Source: myjoyonline

Ghana to pay $4bn on $3bn Chinese loan - Minority alleges

Ghana will have to pay as much as 2.3 billion dollars more for the loan it is contracting from the Chinese Development Bank in addition to the principal and interests, the Minority in Parliament has claimed.

Referring to the off-taker agreement before the House, the Minority claims that though the principal amount of 3 billion dollars plus interest comes to $4.6 billion, the country is committing nearly $7 billion worth of crude oil to the Chinese.

The opposition MPs also add that pricing the crude oil at $85 when the commodity is currently selling at more than a hundred and ten dollars a barrel is outrageous.

MP for Manhyia, Dr Matthew Opoku-Prempeh told Joy News the red flags either smacks of corruption or a failure by the President to do due diligence on the agreement.

He said while the Petroleum Revenue Management Law states clearly that petroleum revenues cannot be collatoralised for more than 10 years, the off-taker agreement on the Chinese Development Bank (CBD) loan provides that the Chinese can lift oil from Ghana for upto 20 years.

"There is going to be a total of 90 crude oil liftings and every crude oil lifting is supposed to be about 950,000 barrels of crude oil," which brings the total amount of crude oil lifted to over eight million barrels.

He said it was intriguing that while in the three years that President Mills has been in power oil has never sold below $100 per barrel, the government will enter into an agreement with the Chinese and peg the price of crude oil to be sold to them at $85 per barrel.

He wondered whether the president was aware of the true cost of the loan to the country.

"When the president was approving this off-taker agreement, where was [his mind]? Did he read [the document]? How can you owe someone 4.6 cedis and pay 7 cedis"? he asked.

Officials of the Ministry of Finance say they will study the issues raised by the Minority and respond appropriately at the appropriate time.