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04 July 2017

Bawumia explains $15bn Sino cash; ‘Gov’t brings land, China brings tractor’

Dr. Mahamudu Bawumia

For at least the second time in public, the government has pushed back claims that $15billion cash expected from China amounts to borrowing.

This time around, Vice-President Dr. Mahamudu Bawumia who negotiated the deal has used an analogy to make the point that the money is not a loan but a joint venture.

“If you have a 1,000 acres of land but you don’t have money to buy a tractor.

“You can say to somebody ‘I will use 50 acres of my 1,000 acres and you and I will go into joint production. You bring the tractor and the inputs, I bring the land'”.

Ghana wants to give “less than 5%” of its bauxite reserves in exchange for the money.

The push-back from government comes after political rivals and critics say the government has been caught over-borrowing and adding to the national debt against its campaign rhetoric.

Borrowing is a political charged terminology in Ghana especially after the NPP then in opposition severely castigated the Mahama-led NDC government for borrowing.

There is intense attention on how the New Patriotic Party government will raise money to fulfil an ambitious list of campaign promises after tax payer funding was ruled out as terribly inadequate.

The Vice-President who is the head of the government’s economic management team which negotiated the deal with China two weeks ago has dismissed fears Ghana’s more than 120billion cedi debt is set to rise.

Addressing an Africa-China Joint Research and Exchange program, Bawumia said “somehow people think that we have gone for a Chinese loan…it is not a lending of money to Ghana”

He said this China deal is unlike the old borrowing pattern under previous governments.

This new deal, he said, is a “win-win” situation which government looks to replicate with other countries as a way of attracting investments.

Ghana has 960million metric tonnes of Bauxite reserves worth $460 billion, government has said.

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