The International Monetary Fund (IMF) has disclosed details regarding Ghana’s four collateralized Chinese loans in connection to their $3 billion bailout program.
The report revealed that failure on the country’s part to fulfill its obligations under the loan agreement with China could mean it would lose revenue earned from its mineral resource and electricity sales.
Ghana has previously borrowed over $5 billion from at least 41 different Chinese loan facilities in the last 20 years.
IMF data shows that if Ghana defaults on any of their loans contracted with China, China could exercise its right to use revenue generated from Ghana’s oil, cocoa, bauxite, or sales from electricity to pay-off the debt.
This is due to Ghana collateralizing eight of their national assets to obtain these loans from China. The country currently owes China $1.9 billion, of which $619 million is collateralized.
The IMF report serves as a warning to Ghana, urging the country to pay close attention to their financial obligations as failure to comply with the agreement could potentially result in massive losses of our national assets.
This revelation highlights the increasingly close financial ties between Africa and China, as the Asian economic superpower becomes a major player in funding infrastructure and other development projects in Africa.
It is worth noting that the IMF report indicates the scale of Chinese lending to Ghana, suggesting that the country might be at risk of over-dependence on China for its infrastructure and economic developments.