Ghana on Way to Chinese Debt Trap -Can’t pay repay Sinohydro loan

Ghana is on its way to become the next casualty in China’s infamous debt trap says the African Centre for Energy Policy (ACEP) as its report shows that the country will not be able to repay the US $2 billion Sinohydro barter agreement with China.

ACEP says that Ghana’s assurance that it will rely on revenues from the proposed Integrated Aluminum Industry will fail. ACEP says its warning is based on an official research done to ascertain the veracity of that repayment arrangement.

Parliament in July 2017 approved the Master Support agreement between Ghana and Sinohydro Corporation Limited for the construction of some major infrastructure projects in the country.

But according to ACEP’s analysis, the repayment plan may not play out as expected.

In ACEP’s estimation, the five million tonnes of bauxite expected to be mined and about two million, five hundred thousand tonnes of alumina to be extracted from reserves in Ghana will yield a mere $48 million, an amount woefully inadequate to meet the $260 million per year commitment Ghana made in the Sinohydro deal.

The Executive Director of ACEP, Ben Boakye says: “We say we are going to produce 5 million tonnes of bauxite and the peaks of it can give you about 2.5 million tonnes of alumina. Assuming that a company will mine and refine and give you alumina benefits, what Ghana will get from that is about 125,000 tonnes of alumina. If you trade that on the market, what Ghana is going to get is about $48m.”

“What Ghana is going to get is about $48 million yet our commitment to repay the loan is about $260million every year so that raises a fundamental question about how we are going to pay the money every year for the $2billion,” Mr. Boakye said in an Interview on CITI FM monitored by Whatsup News.

Already, China has taken over national assets of several countries in South America, Asia and Africa because they gave them loans that were too hefty to repay.

Ghana is on its way to become the next casualty in China’s infamous debt trap says the African Centre for Energy Policy (ACEP) as its report shows that the country will not be able to repay the US $2 billion Sinohydro barter agreement with China.

ACEP says that Ghana’s assurance that it will rely on revenues from the proposed Integrated Aluminum Industry will fail. ACEP says its warning is based on an official research done to ascertain the veracity of that repayment arrangement.

Parliament in July 2017 approved the Master Support agreement between Ghana and Sinohydro Corporation Limited for the construction of some major infrastructure projects in the country.

But according to ACEP’s analysis, the repayment plan may not play out as expected.

In ACEP’s estimation, the five million tonnes of bauxite expected to be mined and about two million, five hundred thousand tonnes of alumina to be extracted from reserves in Ghana will yield a mere $48 million, an amount woefully inadequate to meet the $260 million per year commitment Ghana made in the Sinohydro deal.

The Executive Director of ACEP, Ben Boakye says: “We say we are going to produce 5 million tonnes of bauxite and the peaks of it can give you about 2.5 million tonnes of alumina. Assuming that a company will mine and refine and give you alumina benefits, what Ghana will get from that is about 125,000 tonnes of alumina. If you trade that on the market, what Ghana is going to get is about $48m.”

“What Ghana is going to get is about $48 million yet our commitment to repay the loan is about $260million every year so that raises a fundamental question about how we are going to pay the money every year for the $2billion,” Mr. Boakye said in an Interview on CITI FM monitored by Whatsup News.

Already, China has taken over national assets of several countries in South America, Asia and Africa because they gave them loans that were too hefty to repay.

Economists have warned that this is the debt trap that China hopes to use as its trump card on its way to become the world’s superpower.

Economists have warned that this is the debt trap that China hopes to use as its trump card on its way to become the world’s superpower.