$3b Chinese loan agreement back to parliament

Seth Terkper

A new master facility agreement (MFA) between the government and the China Development Bank (CDB) for $3 billion to finance infrastructure projects under the Ghana Shared Growth and Development Agenda (GSGDA) has been laid before Parliament.

The new agreement, which is an addendum to the original document, is to ensure that changes that had been made since the agreement was approved by Parliament are reflected in the document.

The original MFA was laid before the House in August 2011 and approved under a certificate of urgency.

Briefing newsmen on the new development after laying the paper before the House, a Deputy Minister of Finance and Economic Planning, Mr Seth Tekper, said one of the changes in the original document was the definition of the off-taker clause.

He explained that in the original document, it had been captured that Parliament had approved of the agreement and that the approval of the loan by the CDB should reflect in the new document.

He said another reason for the addendum was that the CDB offices that would disburse the facility were located in Hong Kong, and since within the original document nothing of that sort was mentioned, there was the need for that to be captured.

Mr Tekper explained that the new document would also reflect the fact that the International Monetary Fund (IMF) had waived its conditionality that would have prevented Ghana, as a sovereign nation, from entering into such an agreement with the CDB.

“We cannot subject our right to contract a loan as a sovereign country to our obligation to any international body,” he said.

Even though two agreements under the MFA which allowed Ghana to source $1 billion out of the $3 billion had already been laid before the House and referred to the appropriate committees for consideration, the Speaker directed that the new development should take precedence over clauses within the original document.

According to the Member of Parliament (MP) for Essikado/Ketan, Mr Joe Ghartey, “The neatest way is to allow the House to consider the addendum and bring it back for approval before other agreements relating to the original MFA are dealt with.”

Contributing to the debate, the Minority Leader, Mr Osei Kyei-Mensah-Bonsu, said since the addendum was an amended version of the original MFA, it be approved first before any off-taker agreement that had been referred to any committee was considered.

The Chairman of the Finance Committee of the House, Mr James Klutse Avedzi, agreed with the suggestion of his colleague MPs, after which the Speaker referred the new document to the Joint Committee of Finance and Poverty Reduction for consideration and report.