Prez Mahama gets waiver

- On commitment fees, saves Ghana $100m

Following President John Mahama’s ‘diplomatic protest’ to the visiting Chinese Foreign Minister early this over the slow disbursement of the now famous US3 billion Chinese Development Bank (CDB) loan and Ghana’s continued payment of the commitment fees attached, the Chinese government has intervened, and CDB has responded favorably.

This reaction from the Chinese also followed The Al-Hajj’s publication of Wednesday, January 15 this year which among other things revealed how the Chinese had capitalize on the delayed disbursement of the $3 CDB loan to bleed the nation’s already struggling kitty with demands of payment of commitment fees on monies which are yet to be disbursed.

Information reaching this paper from our sources both in Accra and Beijing, indicates that following these developments, the Chinese authorities are said to have prevailed on the bank, which has now agreed to waive the fees which are adding to the foreign exchange squeeze the country is facing.

Public uproar was widespread in the country following President John Mahama’s comment and our publication exposing the Chinese double-dealing in the matter.

Consequently, some financial experts and politicians including, Members of Parliament advised government to renegotiate or give up on the CDB loan which was targeted at the transformation of the Ghanaian infrastructure, but has been in abeyance for almost three years after the consummation of the agreement.

The uproar and President Mahama’s direct intervention have coalesced to force the Chinese authorities to reconsider their insistence on the payment of the commitment fees by Ghana, thought to be in the region of about USD 100 million.

Though the Master Facility Agreement covering the loan which was signed on December 16, 2011, required that the Chinese government disburse the full amount in three years in three tranches into some of the most productive arrears of the Ghanaian economy, so far, only a paltry USD600m according to the Ghanaian government has been disbursed.

Per the Master Facility Agreement signed between Ghana and the CDB, the nation was expected to pay commitment fees on all undisbursed sums.

“Commitment Fee: one (1%) per annum on the undrawn and un-cancelled balance of the loan will become due no later than sixty (60) days after the signing of the MFA”, says the agreement.

Many experts who shared their views when The Al-Hajj first broke the news stated that the agreement is a sell-out, with the Ghanaian government at the receiving end of the Chinese manipulations and exploitative tendencies which is becoming prevalent in the developing world, making nonsense of the so-called South-South co-operation espoused by forbears of the developing countries including the first President of Ghana, Dr. Kwame Nkrumah and his cohorts in the Chinese communist set up.

“If the Chinese have through their delays cunningly got Ghana to pay about USD100m in three years on only USD600m, then how much would our struggling economy cough-out if and when the whole USD3bn is disbursed?” A technocrat from Ghana’s Ministry of Finance told this paper on condition of anonymity.

Other experts also argued that if it has to take the Chinese almost three years to disburse only USD600m to even the most productive and profitable sectors of the economy, then it will take more years for the remaining amount to be disbursed since the other areas are not as lucrative as the gas sector and therefore do not provide enough incentive for any investment.

Sadly but interestingly, the Chinese government had earlier shrugged off numerous complaints from the Ghanaian authorities over the delay in the disbursement.

And as the remaining USD2.4bn is still in abeyance despite continuous appeals from the Ghanaian authorities, President John Dramani Mahama is said to have assembled a high-level government delegation led by Finance Minister Emmanuel Seth Terkper, who are currently in China to facilitate the release of the remainder of the $3 billion CBD loan part of which is to be used to construct landing beaches and expand the Takoradi port.

But following concerns being raised about how the Chinese government is trying to employ exploitative tactics to pull a fast one on Ghanaians, they are said to have announced their intention not to charge the commitment fee going forward.

The $3-billion loan from the China Development Bank (CDB) is expected to be used by the government for a number of development projects.

They include the Western Corridor infrastructure renewal project, that is, the Takoradi-Kumasi road and the Dunkwa-Awaso railway line; the Takoradi Port retrofit phase 1; the Sekondi free zone project and phase one of the Accra Plains irrigation project.

The rest are the coastal fishing harbours and landing sites re-development project to cover Axim, Dixcove, Elmina, Winneba, Mumford, Senya Beraku, Jamestown, Teshie, Tema, Ada and Keta; the Eastern Corridor multi-modal transportation project which involves the upgrading of the Volta Lake ferries, pontoons and landing sites at Kpandu-Amankwakrom, KeteKrachi-Kwadwokrom, Yeji-Makongo, Tapa Abotoase and Dzemini, and the upgrade of the Akosombo and the Buipe ports.