Business General

We will keep borrowing – Akufo-Addo

President Nana Addo Dankwa Akufo-Addo has said his government will continue to borrow money to put up projects he described as “assets”, stressing that every country borrows.

Speaking at an entrepreneurship forum organised by the Tony Elumelo Foundation in Nigeria, Thursday, the President mentioned that many developed countries borrow, including the United States borrow.

“We will borrow money; everybody borrows money,” he noted. “The United States of America is one of the biggest debtors in the world. So borrowing money is not necessarily a betrayal of the concept of independence. The key for us in borrowing money is that we borrow money to create assets that will allow us to pay the money back. That is the key…If we borrow the money and use it properly it is an asset for us in expanding our economy and infrastructure.”

The President was responding to a question from one of the participants who asked why he goes for loans from China despite his Ghana Beyond Aid mantra.
“Borrowing money is not aid,” said Nana Addo as he defended the move by the Chinese government to earmark $60 billion fund for infrastructure projects in Africa.

“What President Xi Jinping offered is a $60 billion fund which African countries can access, not as aid but as loans. If you can produce a project that the Chinese think is worth supporting, you can have access to that money, but you have to pay it back.”

At the China-Africa Forum for Cooperation (FOCAC) 2018 summit in October, China announced a new $60 billion kitty for Africa’s development as part of a raft of new measures to strengthen Sino-Africa ties.

The money will be channelled to projects aligned to the Chinese government’s Belt and Road Initiative covering telecommunications, construction of roads, bridges and sea ports, energy, and human capacity development.

These countries, particularly include Kenya, Tanzania, Ethiopia, Djibouti and Egypt.

The funding is broken down into several parts with $15 billion being categorised as government grants, $15 billion as interest free loans and $ 20 billion of credit lines and $ 5 billion for financing imports from Africa.

One of the African countries which has already received a share of the $60 billion is Ghana.

According to a statement from the office of President Nana Akufo-Addo, the country has signed eight cooperation agreements with China during the 2018 China-Africa summit.

One of the deals includes a $2 billion infrastructure agreement for Ghana to improve its roads and develop railways in exchange for bauxite.

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