CHINA’S Sinohydro Group is to provide Ghana with $2bn to finance infrastructure projects in exchange for refined bauxite. The projects include roads, bridges, interchanges, hospitals, housing and rural electrification, says Finance Minister Ken Ofori-Atta.
In his 2018 budget review to parliament yesterday, Ofori-Atta said a bauxite refinery will be established within the next three years in collaboration with selected private partners including at least 30 percent local participation.
The vice president, Mahamudu Bawumia, said last year that Ghana has about 160 million tonnes of bauxite reserves that would fetch the country about $460bn in revenue at current market prices.
‘Our case is that if we need just $20bn to do a major massive marshal plan and we have $460bn sitting in the ground… what we really need is to develop a financing module that utilises a small fraction of those reserves to finance infrastructure,’ Bawumia said.
The government has decided to develop an integrated aluminium industry through six stages. The first stage would be the development of the bauxite mines in Awaso, Nyinahin and Kyebi. The second will be the establishment of an alumina refinery at one of the bauxite sites.
Ofori-Atta said the $2bn to be provided by Sinohydro would not add to Ghana’s debt stock. ‘The $2bn of infrastructure to be provided by Sinohydro would not add to the debt stock, and will involve a moratorium of three years to give Ghana the time to establish an aluminium refinery. After the moratorium period, Ghana will fulfil its part of the barter agreement over another 12-year period,’ he explained.