The International Monetary Fund (IMF) has provided information regarding how Ghana's four collateralized loans from China have exposed the nation to losing some of its mineral resource revenue in addition to energy sales.
Since the year 2000, four significant projects in Ghana have received consistent support from Chinese lenders. Over the course of twenty years, Accra has accumulated around to $5 billion from at least 41 Chinese loans.
With a current external debt portfolio surpassing $30 billion, Ghana is presently debt-trapped and enduring its greatest economic crisis in a generation as a result of several years of nearly unrestrained borrowing.
According to this loan deal, China would be permitted to use any revenues from Ghana's oil, cocoa, bauxite, or even diamonds if Ghana failed to repay its debt.
China appears to be the most important participant at the negotiating table in many debt negotiations taking place in the developing countries. Despite being the biggest bilateral lender in the world, it remains secretive when it comes to its lending practices and how it renegotiates with distressed clients.
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The poorest nations on Earth would have to pay $35 billion in debt service to public and private creditors in 2022, 40% of which would be paid by China alone, according to the World Bank.
According to JoyNews' research, the West African country has at least eight Chinese collateralized loans with a variety of minerals serving as security against failure. Ghana owes China $1.9 billion as of the end of 2022, of which $619 million was in the form of secured loans.https://datawrapper.dwcdn.net/dcs1k/1/
Many of the loan negotiations taking place in developing countries appear to have China as the most significant party present. Even though it's the largest bilateral lender in the world, it keeps its lending procedures and how it renegotiates with distressed clients under wraps.
According to the World Bank, in 2022, debt service payments from the world's poorest countries would total $35 billion, with 40% of that amount coming from China alone.
The West African nation has at least eight Chinese collateralized loans, according to JoyNews' investigation, with a range of minerals acting as a guarantee against default. By the end of 2022, Ghana owed China $1.9 billion, $619 million of which was in cash.
Statutory funds will not be allowed to collateralize revenue streams and issue debt," the IMF has emphasized. The governing body in this regard will not issue any statutory funds with no objection certifications.
For any encumbered assets used as collateral, the Fund has additionally asked the government to offer matching loans or derivatives.
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