IMF Vindicates ADI Position Over US$2b Bauxite Deal
The International Monetary Fund, (IMF), has vindicated the position of the Alliance for Development and Industrialization (ADI) on the US$2 billion bauxite deal.
The IMF recently issued its verdict over the controversial US$2 billion barter agreement with a Chinese company, Sinohydro to start mining some of the massive reserves of bauxite lying beneath the Atiwa forest in the Eastern region.
According to the IMF, this arrangement is purely a barter trade and would not add to the country’s public debt stock. This was the same explanation or position taken by ADI, a think thank group.
Ghana is blessed with being the world's third-largest reserves of bauxite, the raw material for aluminium, which the government is keen on reaping the benefits by engaging in forward sale with the Sinohydro.
Sinohydro is expected to build the country infrastructure worth US$2 billion while in exchange mine the country’s bauxite. The US$2 billion infrastructure including roads, bridges, interchanges, hospitals, housing, rural electrification, in exchange for Ghana’s refined bauxite.
The opposition National Democratic Congress (NDC) has opined that under the current agreement with the IMF and the fact that an agreement with such quantum of money could adversely affect the country's debt stock, the IMF should, as a matter of urgency, stop the Akufo-Addo government from going into this agreement with the Chinese entity. But the IMF has explained that this is a barter and not a loan.
ADI in its earlier press statement asked the IMF not to waste much time on the letter written by the minority since this US$2 billion Sinohydro deal is a barter arrangement and would not add up to the debt stock of the country.
ADI was of the view that this is purely a barter trade deal which is intended to improve on the poor infrastructure in the country.
The Akufo-Addo Government decided to enter into a barter agreement with the Chinese Government by securing US$2 billion in exchange for the country’s bauxite. Dubbed the Infrastructure for Bauxite barter agreement, Ghana is to receive US$2 billion while using bauxite/alumina/aluminium to pay for the amount received. The deal is with Sinohydro of China.
The first tranche of US$500 million will cover a significant number of roads across all the ten regions. It is worth mentioning some of the road networks which will see construction when the first tranche of the money comes; PTC Interchange, Takoradi, Tamale Interchange, New Abirem-Ofoase-Akim Oda road, Atebubu-Kwame Danso-Kojokrom road, Accra City roads, Kumasi City roads, Jasikan-Dodo Peppesu-Nkwanta road,
Tutulega-Sandema-Wiase road, Lawra-Han-Tumu road and Cape Coast City roads.