The Member of Parliament (MP) for Cape Coast South Constituency in the Central Region, Kweku George Ricketts-Hagan, has been predicting the way forward, with regards to government’s external debt negotiations.
President Nana Akufo-Addo a few weeks ago, said his government is “making progress on the external debt negotiations” with its development partners, “since the government announced an external debt service suspension on 19th December 2022, for certain categories of external debt to ensure an orderly restructuring.”
Speaking in an interview, the Cape Coast South MP, noted that: “China is the only country in the world at the moment that is likely to lend money to Ghana.”
According to the MP, “China takes an independent decision most of the time, against the rest of the world and they don’t interfere. China’s foreign policy is that we don’t interfere in your political or financial affairs or whatever. We’re [China] trying to help you, so whether you’re a bad regime or a good regime, we don’t care…We just want to have a good friendship with you.”
Kweku George Ricketts-Hagan
“’We [China] have money, so we’ll give you some and then we collaterise it on the natural resources that we need. China’s interest is natural resources. So, when we [China] take your natural resources, whatever money you want, we’ll give it to you as long as those assets you have, in the long run can become ours [China’s].”
He revealed that: “The bulk of the debt Ghana owes China, is actually for bauxite. We promised them bauxite, the syno-hydro and all that, so the question to be asking is, is the bauxite finished? Why are you going to negotiate? Why go and negotiate if you still have the bauxite?”
The Cape Coast South MP, alleged that Ghana is yet to mine the bauxite meant for the payment of the debt to China. He continued that: “This is what will happen in this arrangement. That what will happen in the end with the China agreement, is that money will be taken for investment and the investment will be in the area of bauxite.”
“The reason for our inability to mine the bauxite, is due to lack of equipment. The Chinese will say, ‘We’ll help them to enable us recover our money. Thus, we’ll agree to give you the equipment to go and mine the bauxite and bring it to us, so take this amount of money’. And that relieve, is what Ghana will put into its reserve to help the cedi appreciate.”
Kweku George Ricketts-Hagan
He, however, stressed that what Ghana is not likely to have is its debt cancelled.
Talks With China Over $1.7bn Debt Positive, Encouraging
However, the Finance Minister, Ken Ofori-Atta, has revealed that conversations with China over Ghana’s debt have been positive and encouraging.
Ghana’s finance minister, Ken Ofori-Atta, travelled to Beijing on Wednesday to meet Chinese officials to discuss a proposed restructuring of Ghana’s debt, according to a source with knowledge of the talks.
China on Thursday, revealed that it would like to enhance communications with Ghana to seek a proper resolution of Ghana’s debt issue, its foreign ministry said.
Spokesperson, Wang Wenbin, made the remark in response to a question on Ghana’s finance minister visiting Beijing for a proposed restructuring of Ghana’s debt.
A tweet on the official Twitter page of the Finance Minister on Friday, noted that Ghana was looking forward to securing external assurances very soon.
“So far, had very positive and encouraging meetings in China! Looking forward to securing external assurances very soon, even as we pass our outstanding domestic revenue bills back home. Great progress on all fronts.”
Ken Ofori-Atta
Ghana, which is struggling with its worst economic crisis in a generation, secured a staff-level agreement with the International Monetary Fund (IMF) in December for a $3 billion loan, though asking lenders to provide financing assurances is a condition for the IMF’s board to sign off the programme.
China is Ghana’s biggest bilateral creditor, with about $1.7 billion of debt. The government’s current priority is to secure IMF board approval, with the fine details of debt treatment operations to follow later, the source added.
A Chinese delegation visited Ghana this month for initial debt talks, which the finance ministry said were “cordial and fruitful”. Ghana suspended payments on most of its external debt last year, effectively defaulting, and still needs to negotiate a resolution with its private international bondholders.
Ghana has already restructured its domestic debt and has requested to rework its bilateral debt under the common framework platform, supported by the Group of 20 major economies. An official creditor committee for talks with sovereign creditors, is still pending.
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