You are here: HomeBusiness2018 10 26Article 695713

Business News of Friday, 26 October 2018


Even the U.S. borrows; $60bn China support 'not aid' - Akufo-Addo

President Nana Addo Dankwa Akufo-Addo President Nana Addo Dankwa Akufo-Addo

Ghana's president has defended China's pledge of $60 billion to Africa for infrastructure development and parried criticisms that by accepting to be a beneficiary of the money, he has betrayed his Ghana Beyond Aid mantra.

"Borrowing money is not aid. What President Xi Jinping offered is a $60 billion fund which Africa countries can access, not as aid but loans.

"If you can produce a project which the Chinese think it is worth supporting, you can have access to such money and you have to pay it back.

"We'll borrow money, everybody borrows money…" the Ghanaian leader said when he spoke at the ongoing 2018 Tony Elumelu Foundation Entrepreneurship Forum in Lagos, Nigeria in a response to a salvo thrown at him that he was undermining his own Ghana Beyond Aid mantra.

"The facility from the president of China is a fund that African countries can access and use to support their infrastructure development; that cannot be aid because it's for a purpose and we have accepted it because of the business potential of our nations," Mr Akufo-Addo noted.

"Many developed nations borrow, America and all other countries borrow and use it wisely. We're not taking aid from China", President Akufo-Addo said.

At the China-Africa Forum for Cooperation (FOCAC) 2018 summit in October, China announced a new $60 billion kitty for Africa's development as part of a raft of new measures to strengthen Sino-Africa ties.

The money will be channelled to projects aligned to the Chinese government’s Belt and Road Initiative covering telecommunications, construction of roads, bridges and sea ports, energy, and human capacity development.

These countries, particularly include Kenya, Tanzania, Ethiopia, Djibouti and Egypt.

The funding is broken down into several parts with $15 billion being categorised as government grants, $15 billion as interest free loans and $ 20 billion of credit lines and $ 5 billion for financing imports from Africa.

One of the African countries which has already received a share of the $60 billion is Ghana.

According to a statement from the office of President Nana Akufo-Addo, the country has signed eight cooperation agreements with China during the 2018 China-Africa summit.

One of the deals includes a $2 billion infrastructure agreement for Ghana to improve its roads and develop railways in exchange for bauxite.

During the summit, President Xi said that China had invested a sum of $170 billion in Africa in the last 3 years.

"China and Africa can forge a stronger comprehensive and strategic partnership. China promises to engage with Africa on a principle of sincerity and real results," said President Xi Jinping.

"China's 1.3 billion people and Africa's 1.2 billion want a shared future," said the Chinese leader as he promised that no obstacle will be allowed to hold back the 'joint march'.

The Chinese leader added that the Road and Belt Initiative-the framework within which his country seeks to grow its trade and investments in Africa, China looks at building mutually beneficial relationships with African nations driven by a desire to achieve shared prosperity for the future good and well-being of mankind.

He also challenged Chinese private companies to directly invest upwards of $10 billion in Africa in the next 3 years.