Vice President Mahamudu Bawumia introducing the Ghanaian delegation to the Chinese Vice President, Li Yuanchao in Beijing during the visit
Vice President Mahamudu Bawumia was all smiles when he returned home yesterday, having managed to secure some mouth-watering deals for Ghana.
It has emerged that he managed to get the Chinese government to pledge some $15 billion to fund government’s massive economic transformation agenda, with the likelihood that a further $4 billion would be committed for various development projects across the country.
The commitment by the Chinese is based on a financing module presented by the government of Ghana that seeks for partnerships to fund its development agenda, leveraging on the minute fraction of its untapped and proven mineral resources instead of the usual borrowing to fund economic programmes.
Addressing the media on arrival at the Kotoka International Airport yesterday, Dr Bawumia said, “We have had some good listening as far as our visit to China is concerned…and our efforts have begun to bear fruits. China and its private sector have committed to support the economic transformation agenda of President Nana Addo Dankwa Akufo-Addo.
“So far, the commitment that we got in China before leaving amounted to a total of $15 billion and there is a possibility that within the next month, when some discussions are concluded, another $4 billion would be added to that,” he told journalists.
According to him, the visit was used to market Ghana and the vision of the President to move the country away from aid to trade and partnerships that would lend support to his ambition to industrialize and improve the infrastructure of the country.
He said the delegation made a case for the enhancement of the partnership with China based on trade investment and not aid; a partnership for shared prosperity for the benefit of both countries, which the Chinese government and that country’s private sector found plausible.
Owing to Ghana’s precarious economic situation, he stressed the need for a paradigm shift in capital funding of developmental projects.
The Vice President said government was finding new ways to finance the country’s development goal and deviate from what he termed as “borrowing ourselves out of space” to seek partnerships and financing modules that would not strangulate the economy.
“Going to China, we were well aware of Ghana’s economic situation.
We needed what really amounts to a big bang approach and a marshal plan for Ghana…and the kind of needs we have in the areas of water, energy, railways, sanitation, road etc, are so massive that we needed a sort of marshal plan to be able to lay the foundation for the strategy of agricultural transformation as well as industrialisation,” he emphasised.
To that end, he said, the delegation presented a credible economic programme of transformation, explaining that the “One District, One Factory, One Village, One Dam, the ‘Planting for Food and Jobs,’ policy and a gamut of policies across various sectors, as well as a portfolio of priority projects, which the Chinese found credible and one that they felt they could support as partners. The delegation also presented a financing module based on the fact that Ghana would leverage on a minute fraction of its untapped and proven mineral resources to fund its marshal plan of development and all capital intensive projects.”
Leveraging natural resources
Ghana is said to have a proven reserve of about 2.8 billion metric tonnes of iron ore; 160 million metric tonnes of bauxite; 430 million metric tonnes of manganese and 430 metric tonnes of limestone, excluding gold and oil.
With that, he said, Ghana’s bauxite reserves alone would get the country about $460 billion at current market prices.
“Our case is that if we need just $20 billion to do a major massive marshal plan and we have $460 billion sitting in the ground…what we really need is to develop a financing module that utilizes a small fraction of those reserves to finance infrastructure.”
The delegation, he said, successfully renegotiated the reactivation of the remainder of the entire $3 billion master facility that was given to Ghana under the previous administration.
According to him, $1 billion was disbursed for the Atuabo Gas Plant but the remaining $2 billion was frozen for certain reasons.
He, however, indicated that “we were able to successfully address some of the concerns and they agreed to unfreeze that amount.
The China EXIM Bank also made a commitment to release $1 billion to support Ghana’s infrastructure.”
“We have come home and we are going to prioritize those infrastructure that would be financed by the MoU; there are many priorities and we would see which projects would go under the MoU.
“It’s a massive show of confidence by the Chinese and it has come about because of the confidence in the President and his government and also the module that we have designed for financing the projects,” he said.
Additionally, the Chinese government also agreed to provide $14 million to government as a grant and an additional $7 million for the Ghana Army.
China also agreed to fund the construction of 90 bridges across the country following a proposal presented by the delegation.
China would also make good on a previous commitment to supply the Ghana Navy with four patrol boats for coastal security.
They have also agreed to construct an interchange at “Point 7” in Tamale, the Northern regional capital.
Dr Mahamudu Bawumia was accompanied on the visit by the Senior Minister, Yaw Osafo Maafo; Trade Minister Alan Kyerematen; Joseph Ghartey, Minister for Railways; Kwaku Ofori Asiamah, Minister for Transport; Kwasi Amoako-Atta, Minister for Roads and Highways; Charles Adu Boahen, a Deputy Minister for Finance; Mohammed Amin Adam, Deputy Minister for Energy; Mohammed Habib Tijani, a Deputy Minister for Foreign Affairs; Gifty Ohene Konadu, Coordinator of the ‘One District One Factory’ initiative and Reginald Yoofi Grant, Chief Executive of the Ghana Investment Promotion Centre (GIPC).