The Vice President, Dr Mahamudu Bawumia, on Wednesday said the Government will use refined bauxite in the country to pay-off the cost of infrastructure that would be constructed by the Sinohydro Corporation of China.
Government has signed a two-billion-dollar Infrastructure Barter Arrangement with Sinohydro Corporation and Vice President Bawumia said the Chinese company would neither mine the country’s bauxite deposit nor take the raw bauxite away.
He said government would rather set up a holding company backed by an Act of Parliament called the Ghana Integrated Aluminum Development Authority that would enter into a joint venture agreement with potential mining companies, refineries and off-takers to establish the bauxite mines and refinery.
“After mining and refining, the Government of Ghana will then use its share of the refined bauxite to pay-off whatever cost of infrastructure provided by the Sinohydro Corporation.
“This will only happen after a period of three years and on condition that Sinohydro has completed the infrastructure projects the people of Ghana have asked them to do,” the Vice President said.
Currently, Ghana has about 900 million metric tonnes of bauxite deposits worth about $50 billion but upon refining it could fetch the nation over $400 billion.
Vice President Bawumia said this at the Ghana Economic Forum held in Accra on the theme: “Building a Competitive Economy for Sustainable Growth”.
The two-day event served as a platform for captains of industry to debate on key issues affecting the Ghanaian economy and proffer innovative ideas to resolve them.
The Vice President said cynics were throwing dust in the eyes of the public about the viability of the arrangement and assured that the country’s technical team had been working out the details of the entire arrangement.
He said the team was also running sensitive analysis to determine the degree of vulnerabilities and the terms most beneficial to the State.
Vice President Bawumia said the Nana Akufo-Addo-led Administration entered into the Barter arrangement to address the country’s growing infrastructure deficit to accelerate growth.
He noted that through that arrangement Ghana would accelerate her development in the areas of hospitals, interchanges, roads and affordable housing as well as rural electrification project, bridges and many other pressing national infrastructure needs.
The Vice President said a billion dollar of the amount would be dedicated to the construction of roads, bridges and interchanges.
He said global experts were urging African leaders to take steps to identify innovative sources of financing their infrastructure development to realise their countries’ economic potentials.
“Linked to this whole bauxite exploration and development drive are beneficial spillovers that will accrue to the larger interest of Ghanaians.
“We’re going to see significant job creation and incomes in the pockets of many Ghanaians.
It will also come with the setting up of many other smaller factories like caustic soda factory and other factories along the value chain,” Vice President Bawumia said.
As part of the bauxite mining and refinery, he said government had started processes to expand VALCO as the main smelting facility for the alumina that would come out of the refinery.
VALCO would witness substantial uplift from its current position whilst serious efforts are underway to revamp the country’s railways and possibly extend them to Paga in the Upper East Region as well as work on both the Eastern, Western and Central spines.
Vice President Bawumia said the bauxite for infrastructure development was in line with the Government’s agenda for value addition to the nation’s raw material and push for rural industrialisation such as the One District-One Factory, One Village-One Dam, and One District-One Warehouse aimed at increasing productivity and agro-processing.
He highlighted some government policy interventions and how they had impacted on the economy so far including the National Digital Property Addressing System, Mobile Money Interoperability Payment System, Smart Drivers Licensing and Registration of Vehicles, Paperless Ports System, National Identification System, and electronic registration of businesses.