[ 2014-07-22 ]

NDC grabs extra $490m; pushes external debt to $12b
Ghana’s borrowing streak, which has become a
subject of debate in recent days, continues
unabated. Parliament was last Friday compelled to
approve various loan agreements sourced from its
development partners by the government, totaling
US$495,788,879.

However, the approval did not escape criticism
from the Minority, which demanded value for money
in such agreements. Among the projects are Phase 1
of the Kumasi Central Market Redevelopment and the
acquisition of buses and spare parts for the two
state-run transport firms (Metro Mass Transit
Limited and Intercity STC).

Out of the above-mentioned amount, US$40,030,463,
sourced from Liaoning Huanghai Automobile IM/EXP
Company Limited, is meant to finance the
acquisition of 200 Huanghai Complete Built-Up
(CBU) Mass Rapid Transit (MRT) City Buses for use
by Metro Mass Transit Limited.

A further US$93,433,416, loaned from the HSBC Bank
under the EKN Supported Export Credit Facility, is
meant to partly finance the acquisition of 295
Scania buses and spare parts for the Bus Rapid
Transit System and Intercity STC Coaches Limited.

An additional US$17,300,000, sourced from same
HSBC Bank under the EKN Supported Export Credit
Facility, would be used to part finance the
acquisition of 295 Scania buses, spare parts and
related infrastructure for the Accra Bus Rapid
Transit System and Intercity STC Coaches Limited.

That notwithstanding, an amount of US$345,025,000
loaned from the Deutsche Bank and its affiliates
and other financial institutions, of which part of
it (US$135,512,500) was obtained under the SAIN
Covered Export Credit Facility, is meant to
finance the Kumasi Central Market Re-development
Project (Phase 1).


The current loan adds up to the country’s
overburdened external debt, which stood at
US$11,461.71 million as at end December 31, 2013.
Some Members of Parliament, who were not enthused
with the short period with which loan agreements
were brought to the House for consideration and
approval, said it inhibits in-depth scrutiny,
thereby impacting negatively on value-for-money
for the country.

“It does not enable us to thoroughly and
diligently consider it, even in committees, with
the best of intentions,” noted the New Patriotic
Party (NPP) MP for Sekondi, Papa Owusu Ankomah. He
added: “Please, let us give ourselves the
opportunity to be able to meaningfully exhaust all
the agreements, so that, at the end of the day,
when we come out with our report, and we debate
them, we can say to ourselves that we have dealt
very well with the referrals brought before this
House.”

The strategy for the late submission of loan
agreements for Parliamentary approval, presumably
to avoid critical analysis, mainly from the
opposition, has often been adopted by successive
governments for fear that it might be shot down
when submitted early.

Such agreements are normally brought to the
plenary for consideration during the last day
sitting of a particular session, where members are
busily considering other business of the House,
thereby, to a greater extent, escaping the eagle
eyes of some members, mainly from the opposition.

Source - allAfrica.com

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