The International Monetary Fund (IMF) has disclosed that given Ghana’s government’s inability to uphold its loan agreement, the Chinese government will probably gain access to Ghana’s mineral and electricity revenues.
The Ghanaian government may not be able to repay four loans it obtained from the Chinese government and secured with Ghana’s mineral resources and energy sales, the fund said, according to a news report by myjoyonline.com. As a result, this may occur.
According to the research, Ghana has acquired at least eight Chinese collateralized loans over the previous ten years with a variety of mineral resources serving as security.
According to the statement, of the $1.9 billion in loan arrangements Ghana has with China as of the end of 2022, collateralized loans account for $619 million.
According to the IMF, loans totaling $619 million were obtained between 2007 and 2018 and were secured by Ghana’s cocoa, bauxite, oil, and electricity revenues.
According to the IMF, “Collateralized debt is any contracted or guaranteed debt that gives the creditor the rights over an asset or revenue stream that would allow it, if the borrower defaults on its payment obligations, to rely on the asset or revenue stream to secure repayment of the debt,”
“Statutory funds will not be allowed to collateralize revenue streams and issue debt. No objection certificates will not be issued to any statutory fund by the governing authority in this regard,” it added.