Home / $2bn-For-Bauxite Deal: Minority petitions IMF

$2bn-For-Bauxite Deal: Minority petitions IMF

The Minority in Parliament have petitioned the International Monetary Fund (IMF) over what the caucus has described as an illegality by government in entering into a deal with Sinohydro Group Limited of China.

By the agreement, Ghana will exchange refined bauxite with US$2 billion worth of infrastructure to be provided by Sinohydro Group Limited.

The Minority are seeking clarification from the IMF on the US$2 billion barter agreement.

Minister of Finance, Ken Ofori-Atta, in his presentation of the Mid-year Budget Review on the floor of Parliament of Ghana on Thursday, 19 July 2018, stated that the Sinohydro transaction is a barter. However, the Minority think otherwise.

“We, the Minority, have carefully studied the provisions and terms of the so-called barter transaction, as officially tabled and passed by Parliament, and have identified a number of legal and technical issues that explicitly make the transaction a loan.

“Thus, as was argued during the parliamentary debate on the transaction, it is the Minority’s opinion that the value of the transaction be added to the debt stock.

“The Minority in parliament would, therefore, like to seek a clarification on this from the International Monetary Fund (IMF),” the petition signed by Cassiel Ato Forson, Ranking Member on Finance Committee and backed by Haruna Iddrisu, Minority Leader in Parliament, stated.

The Minority is of the view that “the terms of the barter agreement contained in the joint memorandum to parliament, are totally inconsistent with, and contradict the position of the Finance Minister that the agreement is not a loan agreement and will not add to the public debt stock”.

The Minority believe Mr Ofori-Atta “will be engaging in an act of gross illegality if he attempts to push this through and we are convinced that Sinohydro—a company that is not new to the terms of our Constitution and terms for borrowing—and the Chinese authorities, will tread cautiously in entering into this agreement”.

They also argued that any revenue from bauxite is state revenue, and therefore, should be captured as part of government revenues.

“Similarly, the expenditure on roads, railways, etc., using the bauxite revenue, are government expenditures and should be captured as such. We are of the view, therefore, that the above transaction should be included in assessing the government’s fiscal position at any given point in time,” the petition added.

Source: Ghana/ClassFMonline.com

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