The government of Ghana plans to trade off the country’s stock of bauxite to China in return for roads, hospitals and other projects.
Finance Minister, Ken Ofori-Atta, who revealed this in Parliament on Thursday when he presented the 2018 mid-year budget review said Sinohydro Group Limited, is expected to “provide US$2 billion of infrastructure including roads, bridges, interchanges, hospitals, housing, rural electrification, in exchange for Ghana’s refined bauxite.”
Ken Ofori-Atta noted that a bauxite refinery would also be established within the next three years in collaboration with selected private partners with 30 percent local participation.
“Mr. Speaker, I would like to assure this august House that the US$2 billion of infrastructure to be provided by Sinohydro would not add to the debt stock and will involve a moratorium period of three (3) years to give Ghana the time to establish an aluminum refinery. After [the] moratorium period, Ghana will fulfill its part of the barter agreement over another 12-year period,” he added.
Over 60 projects nationwide comprising roads, classroom blocks and office complexes are expected to benefit from the first phase of the initiative.
$460 billion bauxite reserve
Ghana’s bauxite reserve is estimated at $460 billion.
Ofori-Atta complained in Parliament that, currently, Ghana has an infrastructure deficit of about $30 billion blaming it on “inadequate financial resources.”
He is however hopeful that the $2 billion to be gained from swapping the bauxite will go a long way in further reducing the infrastructure deficit.