Ghana opposition seeks IMF's intervention on $2 billion Bauxite deal with Sinohydro Corp

Ghana’s opposition party seeks the opinion of International Monetary Fund (IMF) regarding the US$2 billion deal agreed between the government and China’s Sinohydro Corp Ltd which assures infrastructure development in Ghana in exchange for bauxite.

Under the deal China’s Sinohydro Corp Ltd will provide $2 billion for government road projects in exchange for refined bauxite exports. President Nana Akufo-Addo is expected to visit China next week to finalize the deal. The government prefers to call it a barter deal instead of a loan.

However, the opposition in parliament considers the deal to be a loan with implications for an already over-burdened taxpayer. Opposition leader said they were requesting IMF’s intervention because government once said loan repayment costs were a hurdle in realizing Ghana’s development program.

IMF Ghana chief Natalia Koliadina confirmed her office had received the letter. “We have received information from the parliamentary minority regarding the Ghana-China bauxite deal. We will need to have more information to determine the nature of the transaction,” she said in email response to Reuters.

Ghana is in its final year of a $918 million credit deal with the IMF and must meet benchmarks like trimming its public debt to successfully exit in December. Ratings agency Moody’s estimates that Ghana’s debt will rise above 70% of gross domestic product (GDP) by December, compared with 63.8% as of May.

Ghana, which exports bauxite, gold and cocoa, plans to build an alumina refinery by the end of 2019.