It has been revealed that Ghana has an unlimited access to the United States Exim Guarantee Bank and thus can access any amount of loans it requires for embarking on developmental projects of the country.
Mr Ryan Bowles, the Chief of the Economics Section at the US Embassy in Accra made this known in a discussion with the Executive Director of the Danquah Institute, Gabby Asare Otchere-Darko, at a roundtable discussion organised by DI to discuss the $3 billion Chinese loan facility.
According to Mr Bowles, the US is particularly interested in ensuring transparency in any loan agreements and the developmental projects for which the loans are accessed.
He also revealed that the US is quite flexible as to who gets the contract for the execution of projects for which loans are accessed from the US bank. A typical example is the construction of the Mallam-Tetteh Quarshie highway which falls under the Millennium Challenge Account. The contractor, in question who is executing this project is Chinese, China Railway Wuju Corporation.
Interest rates on loans accessed from the US are comparatively lower than, for example, the 6-month LIBOR that comes with the $3 billion Chinese loan. The benchmark interest rate in the United States was last reported at 0.25 percent whilst the 6-month LIBOR currently stands at 0.59 percent.
With regards to China’s aggressive push for a strong presence in Africa, Mr Bowles stated that the US is not worried about this phenomenon and is not aggressively pursuing investments in infrastructural development in Africa, unlike China.
Gabby, who left Ghana last night for some research work in the United Kingdom, said that engagement with China is an important phenomenon for the African continent. However, beyond the quantitative impact of growing aid, finance, trade and investment flows, this engagement may have significant qualitative impacts on African development, positive and negative.
“The critical issue for African states is to make the growing relations with China a win-win one, which would help drive Africa’s quest for competitive industrialization. This was my argument in May 2009, leading to U.S. President Barack Obama’s June visit to Ghana,” Gabby noted.
He continued, “It is important for Ghana, as a country, to recognizing its own bargaining strength. It is important that we pull the brakes, decide for ourselves what it is that we want as a country and how we want it.”
Source: Danquah Institute
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