Sun Baohong in a meeting with Mr Seth Terkper
Sun Baohong in a meeting with Mr Seth Terkper

That China is moving fast to equal, or even, surpass Western imperialists? wanton exploitation and manipulation of resources of the African continent to satisfy its insatiable appetite for global influence and dominance would be an understatement.

Sun Baohong in a meeting with Mr Seth Terkper
Sun Baohong in a meeting with Mr Seth Terkper

China, which was regarded as a friendly partner in the globally recognized south-south co-operation, has suddenly developed an unparalleled craftiness, baiting struggling African economies to pander to their whims and caprices, with Ghana no exception.

The most populous nation in the world has in recent times latched on to its financial might to blackmail, intimidate and exploit Ghana in almost all agreements it has entered into with government of the distressed West Africa nation.

Having succeeded in swindling Ghana over $100 million in commitment fees on the undisbursed facility in the now infamous $3 billion CDB loan citing safety of their investment, the Chinese government is again employing similar crude tactics to brow-beat government of Ghana to do its bidding; award contracts to Chinese firms. They have therefore, stubbornly turned down a request for financial assistance to construct three major road projects in Ghana which were earlier agreed to.

It would be recalled that per the Master Facility Agreement (MFA) covering the CDB loan signed on December 16, 2011, the Chinese government was obliged to extend a $3 billion facility to Ghana to be disbursed in full in three years and in three tranches for 12 infrastructural projects earmarked, however, it took the Chinese about three years to release a paltry $600m to Chinese contractors working on the Gas Infrastructure Project at Atuabo in the Western region. Despite their lackluster attitude in releasing the funds, the project has since been completed at a total cost of nearly one billion dollars and it is now operational.

Some of the 12 key projects to be undertaken under the MFA apart from the Gas processing plant included, the Western Corridor railway line, Port infrastructural development, Fish landing sites, development of agriculture etc. But, the Chinese, like modern day imperialists, chose to fund only the ?juicy? aspect of the deal and have since abandoned the rest, claiming the other projects to be funded by the loan were not productive. They were also reported not convinced with the preparatory works from the Ghanaian authorities to receive the remaining amount for those projects.

Media reports quoted sources both in Accra and Beijing as saying the Chinese authorities made all manner of demands they know Ghana could not meet in order to find an alibi for not releasing the rest of the money. Notable demands by China included more oil; an additional 2,000 barrels of crude oil to the earlier 13,000 barrels a day guaranteed them by Ghana government.

Similarly, the Chinese government, after Ghana?s Ministry of Communications abrogated a contract of one of its companies, StarTimes, for delay and non-performance, threw all diplomatic niceties to the wind by blatantly refusing to grant a loan facility targeted at some key sectors of the Ghanaian economy.

Even though official correspondence from the Chinese government explained that the road projects for which reason government of Ghana requested the loan facility were not viable enough for it to sponsor, The aL-hAJJ?s independent investigations have uncovered that there is more to what officials of the world most populous nation is saying.

While some Ghanaians have downplayed opposition Member of Parliament for Okaikoi Central, Patrick Boamah?s edict that the abrogation of StarTimes contract for the implementation of the Digital Migration regime is the reason behind the ?strong loan rejection? by the Chinese, this paper can confirm that, indeed the decision by the Ministry of Communications to end its business dalliance with the Chinese IT firm and re-award same contract to a wholly own Ghanaian IT firm, K-net, is not unconnected to the Chinese snub.

Reports are that, following government of Ghana?s decision to dump StarTimes for delay in executing the digital migration contract and lacking the capacity to deliver, the Chinese government, just as in the case of $3 billion CDB loan, has resorted to intimidation, arm-twisting and blackmail to frustrate the already cash-strapped Ghanaian government.

Officials of the Chinese government, The aL-hAJJ?s sources say, are enraged over government?s decision to abrogate StarTimes contract, and as a sign of ?teaching Ghana a bitter lesson? have decided to end its long standing relationship with West African nation for any request for financial assistance. This assertion was forcefully communicated by no mean a person than the Chinese ambassador to Ghana, Sun Baohong, at a meeting with government officials on the termination of StarTimes contract.

StarTimes, a Chinese company had its contract to supply and install the Digital Terrestrial Television network platform for Ghana abrogated by Ghana government in January this year.

According to the Ministry of Communications (MoC), the contract was abrogated because StarTimes had made false representations, as well as failed to meet its part of a contractual arrangement to pre-finance the project and be reimbursed within a 10-year period.

?The main reason why the contract was awarded to StarTimes Ghana was because of its proposal to the MoC indicating its capacity to facilitate the necessary funding for the project through concessionary loan arrangement from the China Exim Bank,? an affidavit in opposition to a writ filed by StarTimes challenging the abrogation noted.

It further stated that upon careful scrutiny and due diligence after the contract had been awarded to StarTimes, it became abundantly clear that the Chinese IT Company was not in a position to pre-finance the project, and also the company made false representations with regard to its claim that it had procured letters of intent from the China Exim Bank.

The contract was therefore subsequently awarded to K-Net, a wholly Ghanaian-owned IT firm at a cost of $82.4 million, an amount that is $13 million cheaper than the $95 million StarTimes demanded to execute the contract it could not undertake.

The Chinese company, according to latest reports, has filed a suit at the international arbitration against government of Ghana for a whopping $200 million claim over what it described as wrongful termination of contract.

It was in the midst of this ?fisticuff? between the Ministry of Communications and StarTimes that, the government of Ghana, having applied for a loan from the Chinese government to help it construct the Accra Outer Ring Road project; the Mankessim-Agona Swedru-Nsawam Road Re-construction project and the Dodowa-Kpong & Somanya-Akuse Junction Road Re-construction project and four others, had its request furiously turned down.

In a shocking response, the Chinese government said its concessional loan facility could not be used to finance projects which did not have good financial benefits.

In a letter dated June 26, 2015 and addressed to the Finance Minister, Seth Terkper, the Chinese government said the road projects in question were not viable enough for their support.

?Having studied the documents for the above projects, we would like to advise you that according to the current guidelines by Chinese government, the Chinese government concessional loan and preferential buyer credit are mainly directed towards projects with good financial benefits and repayment abilities,? Mr Ji Chun, Regional Director of the Chinese government, said in a reply to the loan application.

?According to the relevant documents, these three road projects lack financial benefits. Thus, it appears that it?s not appropriate to utilize a Chinese concessionary loan to implement these projects,? Chun added.

This has ignited heated debate in Ghana, with many people including MP for Okaikoi Central, Patrick Boamah and Founding President of IMANI Ghana, Franklin Cudjoe, questioning the official reasons proffered by the Chinese government for refusing the loan application.

According Franklin Cudjoe, Chinese government has no business reminding government of its debt situation, ?for me the issue about debt burden is for our [Ghana?s] internal discussion. That is none of their business,? he stated.

Meanwhile, Finance Minister Seth Terkper, while reaction to the Chinese government?s decision to turn down government?s loan request, said although details of the reason for rejecting the loan by the Chinese were not readily available to him, it should not be seen as a major setback.
?The rejection of a loan is not new?It happens often times,? he stated.

He revealed that a team from Ghana is likely to pursue the rejected loan with the Chinese in the coming days.

He added that reasons cited by the Chinese for rejecting the loan may not be wrong, stating ?The Chinese don?t give us one type of loan. The Chinese give us loans which are concessional; the Chinese give us loans which we take preferential credit and there are commercial loans and the Exim expects that when you apply for a loan for a commercial project, the project should be able to pay for itself.?

Stay tuned

Source: The Al-Hajj


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