What Was the NPP Thinking? …… The 15 billion Dollars Chinese Loan Will Burden Generations Of Ghanaians

I am still struggling to come to terms with the ever increasing willingness of the governing NPP to borrow at all cost ostensibly to jumpstart our nation’s wobbly economy. Very baffling is the fact that while it was in opposition, the party spent considerable time lambasting the then ruling NDC for allegedly going on borrowing sprees.

The NPP subsequently vowed to pursue a different strategy if elected and profusely promised unsuspecting Ghanaian voters that it won’t go cup in hand around the world asking for alms, handouts. However, since gaining power in 2016, the party has gone back on its word; in short, borrowing from the International capital market has become an integral part of its operations.

Let me stress that contracting loans from overseas partners for development purposes is sound and prudent policy particularly so if local financial resources are sorely lacking. Some loans at their core, are good loans. They come with soft terms of payment spread over a long, reasonable time period, more importantly, they come with no strings attached.

But, there are other loans that just leave you scratching your head, befuddled and wondering out aloud why anyone would even go in for such loans, senseless and entrapping as they are. These types of loans with their exorbitant interest rates invariably saddle the borrower with a huge albatross, a financial burden that will be extremely difficult to get rid of.

Unfortunately, our overly ambitious yet clueless government has contracted such a loan from the Chinese and the implications of this poorly thought out move by the government represented in the person of the vice president, Dr. Mahmoud Bawumia, will leave Ghanaians holding the bag, that is, current generations and generations of Ghanaians yet unborn will be stuck paying back the loan.

And the reason our hard earned precious foreign exchange will go towards servicing this loan is simply because it is staggering, an eye popping 15 billion U.S. dollars to be used, as the vice president lamely explained, in the development of our vast bauxite deposits, to buy equipment for the police and army and to meet some infrastructural needs.

If you examine the loan without your partisan lenses, you will realize that the Chinese are the winners hands down, they were advantaged by simply being the lenders. They therefore had the upper hand in the negotiations. Yes, our natural resources will be tapped and exported for badly needed foreign exchange.

In return however, the Chinese will dictate to us. Simply put, we are at their mercy. In the unlikely event that we default on the loan, they will wrap things up, pack their equipment and go somewhere more lucrative to their broad economic and financial designs or worse, make unnecessary demands on us.  In a nutshell the Chinese have us by the throat.  We will surely be overburdened by this debt.

By contracting this loan, the NPP has inexplicably thrown the country into China’s debt trap. The Chinese debt trap is a strategy of advancing huge loans to poor developing countries that they cannot pay back in exchange for their natural resources.

Sri Lanka’s case with the Chinese should have taught the NPP to tread carefully in its dealings with the second global super power. This is how the case unfolded: Sri Lanka borrowed heavily from China to build a port that was apparently not needed. And, when it could not pay back the loan, it was forced to lease the port to China for a hundred years.

Everything about the 15 billion dollars load was boneheaded. It is a financial boondoggle, a disaster for the country. We expect our leaders to go into financial negotiations with our international partners with their eyes wide opened so they are not taken advantage of. The NPP clearly failed in this case, and has intentionally burdened Ghanaians financially.

The government should be told in plain terms that you cannot borrow your way out of poverty. A country must be innovative and productive if it wants to develop. These are the virtues the NPP should start preaching now.