A Policy Analyst with the Integrated Social Development Centre (ISODEC) Dr Steve Manteaw has expressed concern over the $19 billion funding partnership agreement and commitment reached between the Government of Ghana and China, decribing the amount as too huge.
According to him, the quantum of money raises questions about Ghana’s absorptive capacity and ability to make the most efficient use of the resources that are being pledged, given as there has been times that a lot of developmental aids that have been attracted have gone to waste through corruption.
Vice President Dr. Mahamudu Bawumia has expressed optimism over a $15 billion funding partnership agreement and commitment reached between the Government of Ghana and China.
The funding partnership with China, Dr. Bawumia explained, is not based on the traditional model of borrowing and aid. The new model, he noted, is based on the bargaining power of the country’s natural resources such the 2.8 billion metric tonnes of iron ore deposits, 960 million metric tonnes of bauxite, 413 million metric tonnes of Manganese and not to mention Gold and Cocoa.
Dr. Bawumiahas said the country needs about $20 billion to embark on a massive infrastructure development and it is only appropriate to develop a financing model that leverages a small fraction of the country’s resources in order to secure the needed funding for the infrastructural development ambition of the government of Ghana.
The Vice President added that the Chinese government has welcomed Ghana’s proposed financing model and has committed $15 billion to support the several projects that government intends to undertake. A further 4 billion dollars partnership agreement will also be signed in due course after a few negotiations are concluded in a month’s time.
But speaking on Starr FM Tuesday, Dr Manteaw who’s also a member of the Public Interest and Accountability Commitee (PIAC) said if Ghana is not able to deal with the available resources in a more efficient manne, then the huge Chinese cash will be pumped into the economy but Ghanains will not realize the full impact of the injection of capital.
He urged government to hold on to borrowing such huge amount of money.
“The current government while the party was in opposition and was campiagning for our votes assured that the grass is greener at our feet and that the revenue basket is leaking so badly and so their first priority when voted into power will be to identify the leaks, plug it and conserve enough to finance our national development. I do appreciate the efforts they’ve made so far, a lot is currently ongoing but I think that in the interim they also have a manifesto pledge to fulfill in terms of developmental projects and so they’ll be looking for some intervening financing to deliver on their pledges. While you’ll want to do this, I do not think believe you need this huge volume especially when you’re working at identifying leaks and pluging them to be able to conserve enough to finance your development. So you go for moderate loans in terms of the volume so that while your current mature and begin to yield dividends you’ll be able to generate some from within to complement what you raise from outside.”
Dr Manteaw added: “You should not as a government seek to implement all your manifesto pledges in year one, that for me is a mistake the current government must avoid and therefore needing huge volumes of monies into the economy. That actually raises question over your own absorption capacity. This is not kown for great absorptive country, this country has been very wasteful in the past and so we should go slowly and steadily so that at least we’ll be able to absolve and use resources quite efficiently.”
