Finance minister in China over loan rejection

Finance Minister Seth Terkper has played down fears over the rejection of a loan request from Ghana by China.

According to him, the request and denial of loans between sovereign nations are normal within international circles.

The Export-Import Bank of China (China Exim Bank) has rejected a loan application from the Ghana government which is aimed at constructing some major roads.

According to officials of the bank, the roads concerned are not “financially beneficial”. The roads involved are Accra Ring Road Outer project, Mankessim-Agona, Swedru-Nsawam and the Dodowa Kpong and Somanya Akuse Junction road reconstruction projects.

Debt burden
In a letter, the government of Ghana and the finance minister were asked to consider other financing options. The letter further said taking out a Chinese concessional loan would increase the country’s debt burden.

“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,” Ji Chun, Regional Director of the Chinese government said in the letter.

Commenting on the development, Mr Terkper said the Chinese might have rejected the loan because they feel it could be a burden on the Ghanaian tax payer.

“I just want to assure Ghanaians that the rejection of a loan is not new. It happens often times either through feasibility studies or for some other reasons.

“If they say the projects are not commercially viable, then it could be by their assessment and that is one of the reasons why I am meeting the Chinese Ambassador. I am hoping to travel to China to meet the executives of Exim Bank so we could understand their reasons,” Terkper noted.
Credit: Joy News