GNCCI agrees to support Ghana’s integrated bauxite and aluminium project

The Ghana National Chamber of Commerce and Industry (GNCCI) has agreed to lend its support to the Integrated Bauxite and Aluminium Project of the country, stating that this project represents an excellent step to market the country’s own bauxite reserves.

Mark Badu-Aboagye, president of the GNNCI, explained that dual investment strategies are usually a typical model adopted by resource-rich states for mineral exploitation, which they “spend as you go” (SAYG) and delinked investment.

“In the Chamber’s view, the government appears to be pursuing a conflation of the two models in order to bridge the estimated US$ 30 billion infrastructural gap in the country with the US$2 billion barter agreement with SinoHydro Group Limited of China for Ghana’s refined bauxite.”

Although Mr. Mark Badu heaped praises on the government for pursuing this plan, he cautioned it against the impact of on-going aluminium price volatility.

“We suggest that through broader and objective consultation with stakeholders, the country can structure a more beneficial management of the natural resources via: Concession; Construction; and Off-takers’ (CCOs) rights arrangement,” opined Badu-Aboagye.

He further continued with his suggestion that the government could renegotiate the barter agreement with the People’s Republic of China, which in the chamber’s view, lacks sufficient stakeholder participation at present.

“The barter arrangement will likely result in infrastructure capital equivalent to roughly four per cent of Ghana’s Gross Domestic Product (GDP) and in this regard, concerted efforts are required to address liquidity cycle and spill-over, and the liquidity dynamics of this inflow and its ability to trigger non-natural resource-based capital growth.

“This entails strategic management of the fiscal mirrors with aluminium pricing; infrastructure, industry and project planning; procurement planning to improve procurement practices and processes; improvement in education to address labour and skills’ gaps; and improving the legal regime for off-taker purchasing agreements.”