The International Monetary Fund (IMF) has disclosed specifics regarding how Ghana’s four collateralized loans from China have exposed the state to the potential of losing some of its future mineral reserves revenue in addition to energy sales.
IMF said this might occur because the Ghanaian government is in danger of failing to be capable of paying back four loans it obtained from the Chinese government and secured with Ghana’s mineral resources and energy sales. This was according to a news article by myjoyonline.com.
According to the analysis, Ghana has obtained at least eight Chinese collateralized loans in the last ten years, each with a different type of mineral resource as a guarantee against failure.
According to the statement, of the $1.9 billion in loan arrangements Ghana has with China as of the end of 2022, collateralized loans account for $619 million.
The IMF stated that, loans totaling $619 million were obtained between 2007 and 2018 and were secured by Ghana’s cocoa, bauxite, oil, and electricity income.
“Collateralized debt is any contracted or guaranteed debt that gives the creditor the rights over an asset or revenue stream that would allow it, if the borrower defaults on its payment obligations, to rely on the asset or revenue stream to secure repayment of the debt” the IMF stated.
The government has been urged by the IMF to provide matching loans or derivatives for all restricted assets used as the guarantee.
Hmm Ghana