The International Monetary Fund (IMF) has disclosed that the Chinese government would likely have access to Ghana’s mineral revenue and electricity revenue due to the government of Ghana’s failure to honour its loan agreement.
According to a news report by myjoyonline.com, the fund indicated that this might happen because the government of Ghana is at risk of not being able to repay four loans it acquired from the Chinese government which it collateralised with Ghana’s mineral resources and electricity sales.
The report indicated that Ghana for the past decade acquired at least eight collateralized loans from China with different mineral resources as security against default.
It added that as at the end of 2022, collateralized loans amount to $619 million of the $1.9 billion loan agreements Ghana has with China.
The IMF indicated that $619 million in loans were acquired between 2007 and 2018 and they were collateralised with Ghana’s cocoa, bauxite and oil and electricity revenue.
“Collateralized debt is any contracted or guaranteed debt that gives the creditor the rights over an asset or revenue stream that would allow it, if the borrower defaults on its payment obligations, to rely on the asset or revenue stream to secure repayment of the debt,” the IMF was quoted by myjoyonline.com.
“Statutory funds will not be allowed to collateralize revenue streams and issue debt. No objection certificates will not be issued to any statutory fund by the governing authority in this regard,” it added.
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Finance Minister Ken Ofori-Atta