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Business News of Tuesday, 31 July 2018

Source: 3 News

Government’s infrastructure agreement with Sinohydro is a loan not barter – MP reveals

The Member of Parliament for Adaklu Constituency, Kwame Agbodza, has said the 2 billion dollar infrastructure agreement entered between the government and the Sinohydro Corporation Limited of China is not a barter trade like the country is made to believe, but rather a loan.

Parliament approved a $2 billion Master Project Support Agreement (MPSA) between Ghana and Sinohydro Corporation Limited for construction of priority infrastructure projects.

The agreement, as reiterated by Member of Parliament for the Effutu constituency, Alexander Kwamina Afenyo-Markin, on TV3’s New Day will allow Sinohydro to improve infrastructure, especially roads, in rural Ghana while the government repays with refined bauxite, an act he described as “barter”.

But the Adaklu MP, who is a member of the National Democratic Congress (NDC), disagreed.

He explained that the documents covering the agreement that the government of Ghana has entered into do not stipulate barter, but rather a loan.

Mr. Agbodza argues that the terms of a barter trade do not require the payment of interests, commitment fees and management fees as captured in the contract.

“Under which barter trade do you go and pay 2.8% to 3.3% interest per annum. Under which barter trade do you go and pay commitment fee of 1%. Under which barter trade do you pay management fee of 1.2%. Under which barter trade do you pay a premium of up to 9%?” he quizzed.

“Calling it barter when you’re paying a ridiculous interest”, Mr. Agbodza retorted.

He alleged the President, Nana Akufo-Addo failed to get cabinet’s approval for the deal claiming the president and the vice president took the decision on the blind side of cabinet.

He also wondered why the finance minister who was very vociferous at the time of securing the deal did not sign the agreement but rather the deputy.

Despite his views on the issue, the Member of Parliament for Adaklu Constituency says he is not against the infrastructure development.

He said the NDC believes in infrastructure and that “you cannot develop this country on consumption.”

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