Ghana government aims at funding country's infrastructure deficit with Sinohydro bauxite deal

Ken Ofori-Atta, Ghana’s s Finance Minister has announced a $2 billion deal with Chinese engineering firm, Sinohydro Group Limited, in the parliament to fund infrastructure projects by the government. He said that the deal which will help the government leveraging the country's bauxite deposits will facilitate for Ghana's infrastructure deficit.

"Sinohydro Group Limited of China [will] provide $2 billion dollars of infrastructure of government's choice in exchange for Ghana's refined bauxite. Ghana will establish a refinery within the next three years and select its own partner to undertake the refining of the bauxite," the Finance Minister said.

This agreement, according to him is line with the government’s a strategy of bridging the country's infrastructure deficit through a new investment models based on their natural resources.

According to the Africa Infrastructure Diagnostic Report for 2015 Ghana needs US$ 1.5 billion each year for the next 10 years to meet its infrastructure deficit.

The Finance Minister, however, clarified that under the Sinohydro agreement, "the $2 billion of infrastructure...will not add to Ghana's debt stock."

Official estimates shows that Ghana has an estimated total of over 1.5billion tonnes of bauxite deposits. Out of that, about 200 million tonnes of bauxite deposits are within the Atiwa mountain range at Kyebi, another 350million in Nyinahin, and 1billion tonnes of deposits in Awaso.

Using the 2016 price estimate of $358 per tonne of bauxite, Ghana has a potential $ 554.9 billion worth of bauxite deposits (USGS). Ghana also has much more potential for wealth generation, if the country aims at processing their bauxite into aluminium.