Vice President, Dr. Mahamadu Bawumia has cleared the air on speculations suggesting that government has borrowed a $15 billion loan facility from the Chinese government.

According to him, it was a consensual agreement between both parties; the Chinese government and Ghana’s government to invest 5% of the country’s refined bauxite reserves in order to “unlock the 15 billion dollar amount.

Explaining the details of the agreement, Mr. Bawumia indicated that it was a step in the right direction since it would help support Ghana’s railway construction projects among other things.

He maintained that it was a new financing model being adopted by government as a substitute to the former where monies had to be borrowed to fund projects.

“We could not ask China to give us aid to finance this kind of quantum amount of money we needed, but we knew we had the bauxite sitting in the ground, so we said this is time for a new model, a new financing model, China by and large have been lending money as the old model. We are saying we can’t borrow, but we know we have the wealth so let us find a way”, he said.

He assured Ghanaians of the fact that “government is not borrowing” and that the contract is not a loan but a “joint venture”.

“This new model means that we are not borrowing money from China, somehow people think that we’ve gone for a big Chinese loan of $15 billion”, he stated.

Dr. Bawumia was speaking at a forum organized by the Institute of Democratic Governance (IDEG) on China-Africa relations.

Government has in recent times, come under pressure from the Minority in Parliament and some civil society organizations over its plan to leverage the country’s Bauxite deposits in the Atiwa forest to contract the money.