ACEP Warns Ghana Government on Risks of Chinese Loans

 

A Policy Analyst at the African Centre for Energy Policy (ACEP), Mr. Mohammed Saani Osman, has cautioned the Ghanaian government about the strict conditions attached to Chinese loans, which could pose significant repayment challenges.

Speaking at a media training session on "Chinese Lending Strategy and Ghana’s Debt Sustainability" in Accra on Wednesday, Mr. Osman revealed that Ghana ranks as the 10th highest recipient of Chinese loans in Africa, having secured over $5.4 billion through 54 loan agreements between 2000 and 2022.

He highlighted that the energy sector received the largest share of these loans, totaling $2.3 billion. However, he expressed concerns over the lack of transparency in Chinese loan agreements, which often contain extensive confidentiality clauses and resource-backed repayment structures.

According to him, deals such as the $3 billion Master Facility Agreement, which is repaid through Ghana’s oil and gas revenues, and the Sinohydro bauxite-backed loan, impose heavy financial burdens on the country. Additionally, 60% of contractors under these agreements are required to be Chinese, limiting local participation and economic benefits.

Mr. Osman warned that without careful scrutiny, these loans could depreciate the cedi, hamper local production, and trigger long-term economic instability. He urged the government to thoroughly assess the long-term impact of these financial commitments to avoid adverse economic consequences.


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