‘You can’t keep taking endless loans for projects’ – Australian High Commissioner
Australian High Commissioner, Andrew Barnes, has hammered on the need for transparency to ensure Ghana’s loans do not end up drowning the country in debt.
“I can’t stress enough that there’s got to be transparency and there’s got to be a free and fair tendering process for contracts in foreign investments,” Mr. Barnes said.
He was responding to a question on Ghana and China’s developing trade ties.
During President Akufo-Addo’s recent visit to China, Ghana and China signed eight Co-operation Agreements and Memoranda of Understanding in different sectors of their respective economies.
He left China amid news of a proposal for a $50 billion century bond to be over 100 years.
Also in development is the China Sinohydro Group Limited’s provision of $2 billion of infrastructure; including roads, bridges, interchanges, hospitals, housing, rural electrification, in exchange for Ghana’s refined bauxite.”
Mr. Barnes said developing countries could find themselves in a situation where they take on too much debt.
In that situation, ensuring transparency would be their only shield.
“You can’t keep taking endless loans for projects, but if there is transparency in the process, the economics of what are essentially business deals will be apparent, and if it is a properly managed business venture, the investment should pay itself back, and the debt should be able to be serviced.”
“It becomes a problem if the investment is not done on a commercial basis and does not add up and then Ghana is left with businesses that fail, that are not providing a return on the investments, and Ghana is left with a large debt without any ability to service.”
The Australian High Commissioner added that “as long as the investments are worthwhile and will lay the benefits for future prosperity and developments and growth, well then the investment is a good thing.”