The Africa Centre for Energy Policy (ACEP) has cautioned government to be mindful of some stringent conditional clauses in Chinese Loans Agreements which often make it difficult for countries to service the loans.
A Policy Analyst at ACEP, Mr. Mohammed Saani Osman made this revelations at a Media Training on Chinese Lending Strategy and Ghana’s Debt Sustainability held in Accra on Wednesday.
According to the Policy Analyst, their research findings revealed that Ghana ranks 10th on the list of African countries benefiting from Chinese lending with over $4billion between 2011 and 2022.
He added that 54 loan agreements were identified to have taken place from 2000 and 2022 between Ghana and China valued at $5.4billion with the energy sector, emerging as the primary beneficiary receiving $2.3 billion.
According to him, the Studied samples identified some of the characteristics of Chinese Lending including far-reaching confidentiality clauses, little or no disclosure concerning the size, scope and terms.
The rest are Resource-back(mortgaging Ghana’s oil and gas receipts for the repayment of the US$3billion Master Facilities) and Mortgaging Ghana’s bauxite deposits for the repayment of Sino hydro deal and a mandatory preference of 60% of Chinese Contractors.
Mr. Osman explains that, in view of the aforementioned, coupled with the fact that lending strategy often has impacts on wider economy, there was therefore the urgent need for government to always make analysis of long term gains so as to ensure sustainable lending.
“If we dont change the Chinese loans it will have dire consequences on us a country”, Mr. Osman emphasized.
He also advised Government to adopt a. Lending strategy on how to contract loans while ensuring long term debt sustainability.
