It is emerging that the refusal of the Chinese government to grant loan application put in by the Government of Ghana for the financing of road projects is going to affect many ongoing road projects in the long run.
DAILY GUIDE learnt that apart from the three projects the Chinese government has declined to finance, it is also refusing to refinance the construction of four other projects.
The letter declining Ghana’s loan application, addressed to the Finance Minister, Seth Terpker, and signed on June 26, 2015 by Ji Chun, Regional Director of the Export-Import (Exim) Bank of China, referred the government to an earlier letter dated April 3, 2015, in which the issue of refinancing was discussed.
“In addition, regarding the four re-financing road projects, please refer to our letter dated April 3, 2013. We still suggest that your ministry take other financing resource into consideration,”it stated in part.
The three major roads that were outrightly denied financing included Accra Ring Road Outer project, Mankessim-Agona-Swedru-Nsawam and the Dodowa-Kpong and Somanya-Akuse Junction roads.
According to the Chinese, it was “not appropriate to utilize a Chinese concessionary loan to implement these projects,” adding, “otherwise it may increase the burden of your country.”
Ghana is already struggling with how to finance its mounting debt portfolio currently pegged at GH¢90 billion as at May, 2015.
The government is borrowing money at high interest rate to service interest on debt, a development that keeps the debt profile rising at an alarming rate.
The Asian giant suggested that Ghana should “take financing resource into consideration,” in order to qualify for such a facility.
It said that per the Chinese government’s guidelines, Concessional Loan and Preferential Buyer Credit were “mainly directed towards projects with good financial benefits and repayment abilities,” adding that the road projects for which Ghana was seeking for funds, “lack financial abilities.”
A lot of Chinese road projects in the capital appear to have been stalled of late; and a classic example is the almost-completed 37-Burma Camp-La Palm Junction highway.
The contractor on the site has not been seen working in recent weeks.
President John Mahama has said that despite the large number of road projects underway, there still remained a lot to be done in the sector and added that “There is however, considerable evidence to show that no effort is being spared to fix the country’s roads.”
In his 2015 State of the Nation address delivered on February 26, President John Mahama said, “This year we are beginning what would be the single largest intervention in the road sector in this country.
“The project would see investments of about GH¢1 billion in roads commencing this year and ending in 2019 during my second term in office. These projects will be funded with a mix of Cocoa infrastructure fund financing and Government of Ghana budgetary support.”
He said in the same address that “This year, we will commence work on the redevelopment of the Accra-Tema Motorway into a six-lane highway with interchanges.” However, the year is fast coming to an end without any visible attempt to commence the project.
“Resurfacing works will also take place on roads in North and South Kanda, James Town, Adabraka, Mamprobi, Chorkor, Adenta and Madina,” he added.
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