Seth Terkper, Finance Minister
Details are emerging about how the Mahama-led National Democratic Congress (NDC) government is spending about $6 million on consultancies to chase the $2 billion Chinese loan.
They are currently pursuing the China Development Bank to re-activate the remaining $2 billion of the $3 billion loan which the Chinese discontinued after disbursing $1 billion of it to Ghana.
According to the opposition New Patriotic Party (NPP), the Mahama government is also mortgaging Ghana’s gas resources as part of the deal to get the money from the Chinese.
Gov’t Admission
Minister of Finance, Seth Terkper, later confirmed on Citi FM that the NPP’s claims that the NDC government intends to offer Ghana’s gas resources to China for a period of 19 years starting in 2018.
He downplayed the NPP’s suggestion that the deal has bleak implications for Ghana, explaining that the gas being offered will be drawn from only one of Ghana’s three gas fields.
“The premise for the CDB facility, which is in tune with our self-financing loan strategy is that proceeds from any commercial project must be used to pay for any loans that are used to finance the project,” he said.
Drama
However, the same government through another ministry, has issued a statement denying the finance minister’s admission and saying that cannot happen.
Edward Bawa, spokesperson at the Ministry of Petroleum, said in a statement that “There is no basis for the assertion that Ghana’s gas would be exported for $2 billion.
“All of Ghana’s gas are being used and would continue to be used in Ghana for power generation. We should not confuse the use of proceeds or revenues from the sale of gas or its derivatives to support financing arrangements with the actual sale of lean natural gas and liquids,” Mr. Bawa, who is contesting as NDC parliamentary candidate in Bongo in the Upper East Region, said.
“It is ridiculous to say that Ghana’s gas would be sold to China. The CDB facility simply anticipates the use of revenues from the sale in Ghana to power plants of lean natural gas to support financing. No natural gas would be sold to Chinese to facilitate the financing,” he said.
According to Mr. Bawa, “Any excess lean gas which is not sold to power plants in Ghana would be dedicated to petrochemical industry development, including fertilizer production, to support agriculture in Ghana. Any excess LPG or other natural gas liquids not used in Ghana can also be exported either to our neighbours or to any potential buyer. The ministry therefore entreats Ghanaians to disregard these reports as they do not represent the facts,” he charged.
A careful perusal of the loan facility agreement shows clearly that it was the finance minister who also has oversight responsibility for the Ministry of Power that signed the document on behalf of Ghana, and not even the Ministry of Petroleum.
NDC Taskforce
A special taskforce comprising NDC gurus has already been set up at the presidency to help secure the $2 billion; but before the deal is done, Ghana would have spent $6 million or more on members of the taskforce.
The $6 million is said to be covering three main cost components, with the areas of expenditure listed to include “catered breakfast for Ghana team and visiting guests at negotiating venue; catered snacks for day-long meeting breaks; catered lunch for Ghana team and visiting guests as (sic) negotiating venue; courtesy dinner for visiting CDB team upon closure of negotiation meetings.”
Gas Resources
According to sources, the situation is likely to get worse “because of a dangerous agreement the Mahama government is seeking to secure with China.”
In the original Master Facility Agreement, Ghana committed to supplying, as collateral security, 13,000 barrels per day of crude oil up to 2027 to service the CDB facility; and the Chinese eventually are said to have considered Ghana’s offer as insufficient because of the slump in oil prices, and that compelled them to refuse to release the remaining tranches.
Desperate to get the money, the Mahama government made a new offer to the Chinese, proposing to export to all the Natural Gas Liquids (NGLs) to be processed by Ghana Gas Processing Plant at Atuabo from 2018, estimated at a value of $1.5 billion.
They are said to be using the deal “to compliment crude oil exports as the source of revenue to meet the government’s debt service obligations under the MFA for 2016 to 2021,” as captured in the ‘Decisions Memorandum’ drafted by the Mahama administration this year.
Accruing Revenue
The documents revealed that even before 2018, the Mahama administration intends to “release up to US$450 million from the revenue accruing from the sale of Lean Gas over 2016 to 2018 for purposes of resolving shortfalls in GoG payment obligations under the MFA for 2016 to 2021.”
The source said, “3.4: NGLs production available for sale from 2018 is projected to be approximately 550 metric tonnes per day (MT/day). 3:5: Therefore, we are accordingly also confirming that GNPC is able to enter into an Offtake Agreement, on behalf of GoG, for approximately 550 metric tonnes per day (MT/day) of NGLs for the Term under the MFA.”
It continues under Clause 5.5: “The relevant cash flow estimates… shows that the amount of NGLs to be supplied by [GNPC] (on behalf of the Republic) to any Offtaker, as referred to in paragraph 3.5 above, when aggregated with the relevant cash flow from the crude oil Offtaker Agreement [of 13,000 barrels per day], will be adequate to support payment obligations of the Borrower to the Collection Account, under the Master Facility Agreement.”
Additional Money
According to the source, above everything, “The NDC government is looking up to the Chinese to find an additional US$1.9 billion for the Ghana Gas Processing Plant to build the export infrastructure to make it possible to export all the NLGs to the Chinese.”
The source said the government is using the Ghana Infrastructure Investment Fund to fund the taskforce’s $6 million demand to pursue the loan and mentioned NDC guru Ato Ahwoi as the leader of the taskforce and includes deputy Finance Minister, Casiel Ato Forson .
By William Yaw Owusu