The National Democratic Congress minority in parliament has raised questions about the legality of the 2 billion dollar infrastructure agreement entered between the government and the Sinohydro Corporation Limited of China.
This minority is challenging the position of the government that the deal is a barter agreement that will allow Ghana trade refined bauxite for infrastructure, especially roads, bridges, interchanges, hospitals, housing, and rural electrification.
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Prior to this, the Member of Parliament for Adaklu Constituency, Kwame Agbodza, had raised similar concerns about the agreement, arguingÂ a barter trade does not require the payment of interests, commitment fees and management fees as captured in the contract.
Contrary to the submission of the Finance Minister, Ken Ofori-Atta, on the floor of parliament, Thursday,Â Â July 19, 2018, that the agreement â€œwould not add to the debt stockâ€, the minority thinks otherwise.
â€œWe are of the view that the Hon. Minister cannot unilaterally decide to take the â€˜so-calledâ€™ barter agreement off the public debtâ€, the minority observed in a petition to theÂ International Monetary Fund (IMF).
In the petition which seeks clarifications on â€œsome legal and technical issues as wells some inconsistencies contained in the supposed barter transactionâ€, the minority argued the constitutional provision on which the agreement is premised makes it a loan and not barter.
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Deal Inconsistent with the ConstitutionÂ
They argued Article 181 of the 1992 Constitution and Sections 55(1) and 56(1) of the Public Financial Management Act, 2016 (Act 921) which the finance minister cited are for loan agreements.
Portions of the petition captureÂ some of the constitutionalÂ provisions cited to support the argumentÂ that the arrangement is a loan:
â€œArticle 181 (1)
Parliament may, by a resolution supported by the votes of a majority of all the members of Parliament, authorise the Government to enter into an agreement for the granting of a loan out of any public fund or public account.
Article 181 (2)
An agreement entered into under clause (1) of this article shall be laid before Parliament and shall not come into operation unless it is approved by a resolution of Parliament.
Article 181 (3)
No loan shall be raised by the Government on behalf of itself or any other public institution or authority otherwise than by or under the authority of an Act of Parliament.â€Â Â
The minority maintain that â€œhis [Finance ministerâ€™s] so-called barter agreement is a LOAN and must be treated as such. Hence, he will be engaging in an illegality if he attempts to do otherwise.â€
â€œBuyers Creditâ€ arrangementÂ
They further argued that the arrangement of the agreement is aÂ â€œBuyers Creditâ€, which makes Ghana (Ministry of Finance or its Assignee) a debtor and Sinohydro Corporation Limited, a creditor.
This arrangement according to them â€œmakes it a loan and not a barter agreementâ€.
The minority is again convinced that the facility cannot be a barter and yetÂ â€œmandates the Government of Ghana to provide Collateral by issuing Letter of Support (â€œLoSâ€) and Escrow Account Agreement as security documents.â€
The minority is, therefore, demanding that the transaction should be included in accessing the Governmentâ€™s fiscal position at any given point in time.
Source:Â Â 3news.com