Report By: Ishmael Barfi
The Africa Centre for Energy Policy (ACEP) has sounded a warning to the government about the potential risks associated with Chinese loan agreements, which have been criticized for their stringent conditions and lack of transparency.
According to ACEP’s research findings, Ghana has borrowed over $4 billion from China between 2011 and 2022, with the energy sector receiving the largest share of $2.3 billion.
However, the loan agreements are characterized by far-reaching confidentiality clauses, limited disclosure, and resource-backed repayment arrangements.
This came to light at a day Media Training session on Chinese Lending Strategy and Ghana’s Debt Sustainability held in Accra on Wednesday, 12th March, 2025.
Mr. Mohammed Saani Osman, a policy analyst at ACEP in his presentation, emphasized the need for the government to carefully analyze the long-term gains of these loans to ensure sustainable lending.
He warned that if the government fails to renegotiate better terms, it could have dire consequences for the country.
“The terms of these loans are not transparent, and the conditions are very stringent,” Mr. Osman reiterated.
Adding “If we don’t change the Chinese loans, it will have dire consequences on us as a country.”
ACEP is recommending that the government renegotiate better terms supported by cost-benefit analysis of loan agreements and prioritize medium to long-term benefits when engaging with China or other bilateral partners.
Ghana’s debt stock has been rising in recent years, and the country is facing growing concerns about its debt sustainability.
The International Monetary Fund (IMF) has warned that Ghana’s debt is becoming unsustainable, and the country needs to take urgent action to address the issue.
ACEP therefore calling on the government to prioritize transparency and accountability in its lending practices and to ensure that the interests of Ghanaians are protected.
The organization is also urging the government to diversify its sources of funding and to explore alternative financing options that are more transparent and sustainable.
Source: www.thenewindependentonline.com
