Opposition continues to mount against the US$2-billion bauxite-for-infrastructure deal between the government of Ghana and the People’s Republic of China’s Sinohydro Group Limited, as a local think tank says that the agreement puts Ghana at risk of judgment debts and abandoned projects.
IMANI Africa released a seven-page missive against the deal earlier this week, noting that the Ghanaian government did not put into place a contingency plan to cover financing of the project, placing the government at risk should the under-construction bauxite plant not come online in time.
The think tank warned that past history should give the average Ghanaian pause when considering the positives of the project.
“Without rigorous attention to every detail, Ghanaian leaders risk bungling these projects (as happened in the past and is happening in other African countries) and Ghanaian citizens would be left carrying the can.”
Indeed, the failure of including a contingency plan “is exposing Ghana to considerable financial risk in this whole project,” opined IMANI.
“We may wake up at some point to discover that unless we are willing to tolerate partially abandoned projects or judgment debts, we must activate the advanced payment clause in the master project support agreement (MPSA) for ‘early work’ and thus commit to pay substantial sums to properly prosecute any part of our responsibilities under the foregoing agreement.”
At present, IMANI noted that “all we have by way of a financing plan is some hazy projections based on alumina we don’t have and joint ventures we haven’t signed.”
Rather than signing on with the project in question IMANI suggested that using such funds in the advancement of an integrated bauxite project may be the wiser course.
The plan, which still lacks approval by Ghana’s parliament, will have Sinohydro build US$2 billion in infrastructure in Ghana in exchange for the same amount of profit realized by a bauxite plant yet to be built. The plan continues to come under criticism from various quarters due to the structure of the deal and possible harm to forest land above the deposits to be mined.