So i have been reading and hearing some analyses which are not just misleading but also very inaccurate. Never was it part of the narrative last year after the China trip that government was seeking to enter into a $15 or $20 billion joint venture agreement only for infrastructure for bauxite. And how people juggle between the two figures leaves much to be desired.
For the purposes of education let me state what was the narrative. The entire $15 billion facility was in categories:
1. $2 billion facility between Association of Ghana Industries (AGI) and their sister partner in China called the CNBM,
2. About $6 to $8 billion facility for integrated aluminium industry focusing on bauxite mine and refinery through a joint venture agreement between GoG and any potential off-taker, and other related projects
3. $2 billion infrastructure for bauxite barter facility between GoG and any potential partner. At that time even sinohydro was not in the picture because we didn’t know which company was going to be selected,
4. $1 billion facility for other projects, and lastly
5. Freeing up of the locked $2 billion CDB loan contracted under the previous government.
All these constituted the bigger $15 billion package. We never said anywhere that the entire $15 billion was for infrastructure for bauxite barter and anyone who paid attention to details knew this. I am a bit baffled why people choose to rely on online portal news some of which are themselves defective in terms of accuracy, but not seek to get the actual facts.
Fast forward in 2018, AGI and CNBM have successfully signed their pacts and started disbursing the $2 billion. $10 million of which has been advanced to a sugar factory last month.
The parliament of Ghana has also given approval for the $2 billion infrastructure for bauxite facility and the agreement signed for works to begin.
Works on the bauxite mines and refinery have far advanced. Government has established a holding company backed by an act of parliament this year which will enter into the joint venture agreement for the bauxite mine and refinery. In the next few weeks or months request for proposals will be issued for prospective companies to bid. If we are lucky the cost of the mining and refinery may even come less than the value originally envisaged.
Just this week, as part of the President’s tour to China $400 million of the locked up $2 billion CDB loan has been signed for release for the construction of the fishing landing sites and others.
What this means is that hopefully by the end of 2018, about 95% of the whole $15 billion package announced by the erudite and hardworking Vice President after his visit to China would be realized. And this will mean a high success rate for the biggest deal the nation Ghana has gotten from any official trip by any Vice President for so long a time.
This is remarkable and must be applauded and, if not, should be scrutinised from a more informed position than just lazily seeking to criticise.
The other good thing to note is that Sinohydro is only playing a role to provide infrastructure at the discretion of the government and people of Ghana and not at their discretion.
Government is not going to pay them anything until after 3 years by which time they should have completed the projects. Sinohydro is not a company that is going to mine the bauxite and in other words sinohydro is not a mining company.
Again, what differentiates this from the extant arrangements in the gold and oil sectors is that, here, government is not going to just export raw bauxite but rather add value to it through refining. The $2 billion that will be paid at the end of the day is just a small fraction of the total export value of refined bauxite we have as a country, which is estimated to be around $400 billion.