Executive Director of policy think, Institute of Liberty and Policy Innovation, ILAPI-Ghana, Peter Bismark Kwofie is arguing that the Bauxite Agreement between Ghana and China is not Barter.
In explaining his point of view, he quizzed, What is barter here? and providing an answer, he said, "Barter is a Trading in which goods or services are exchanged without the use of CASH/MONEY. Barter is often Voluntary and individualistic."
According to him, "Resource Backed Loan is all about using the natural-resources as collateral to access sources of finance for investment, countervailing the barriers they face when accessing conventional bank lending and capital markets."
Mr Kwofie further indicated that "the Bauxite belongs to everybody and not to only the government. Government is a caretaker and can't go into Barter Trade."
"Using Commodity-Backed Securities to Support the Future of Ghana's economy is NEVER a Barter Trade. China is Giving you CASH and Ghana is giving out Bauxite (Natural Resource). Do you call this Barter?" He demanded.
Meanwhile, the Vice President Dr. Mahamudu Bawumia has said the arrangement seeks to leverage a fraction of Ghana’s bauxite resources to address the infrastructure challenges, and will provide a wide variety of projects including hospitals, bridges, interchanges, roads, affordable housing, rural electrification, and many others in line with government’s development agenda.
Speaking at the 2018 Ghana Economic Forum in Accra on Wednesday 5th September, 2018, Vice President Bawumia stressed that Sinohydro’s mandate is to construct infrastructure, not engage in mining, and dismissed suggestions that the Nana Akufo-Addo government had sold Ghana’s bauxite to China for $2 billion.
Rather, government has set up a holding company which will soon enter into a joint venture agreement with potential mining companies, refineries and off-takers from across the world who have the capacity, to establish the bauxite mines and refinery, and the proceeds from Ghana’s share of the refined bauxite will be used to pay for the infrastructure.
“What this arrangement does basically, is to say that we agree with Sinohydro that they provide us with our choice of infrastructure worth $2 billion. The Sinohydro Corporation which is going to provide the infrastructure is not the company that is going to mine the bauxite and they are not taking our raw bauxite. In other words, Sinohydro is not a mining company,” Vice President Bawumia emphasised.
“Rather, government in our plans has set up a holding company backed by an Act of Parliament called the Ghana Integrated Aluminum Development Company that will soon enter into a joint venture agreement with potential mining companies, aluminum refiners and off-takers to establish the bauxite mines and refinery.
“After mining and refining, Government of Ghana will then use her share of the refined bauxite to pay-off whatever cost of the infrastructure provided by the Sinohydro Corporation. This will only happen after a period of three years and on condition that Sinohydro has completed the infrastructure projects that the people of Ghana has asked them to do.”
Vice President Bawumia stressed:
“So Sinohydro will be providing the infrastructure, but Ghana will choose its own partner to set up the integrated aluminium development industry. The partners could come from America, Australia, Canada, China, wherever. Once we are confident of the capacity of the potential partners, we can enter into partnership with them.
Alluding to the misinformation campaign being waged against the entire arrangement, Vice President Bawumia assured that the necessary checks and balances have been put in place to ensure Ghana is not short-changed.
“Cynics are throwing dust in the eye of the public about the viability of the arrangement. Like all multiyear financial arrangements, there are risks. Our strong technical team has been working out the details of the entire arrangement and running sensitivity analysis to determine our degree of vulnerabilities and the terms most beneficial for Ghana.”
The Ghana Economic Forum (GEF) serves as a platform to bring captains of industry to discuss, debate key issues affecting the Ghanaian economy, and to put forward solutions to help overcome the many challenges.