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Minister of Finance Seth Terkper has said that government anticipated that China would reject the nation’s loan request for the execution of some road projects in the country, a move which seemed to have embarrassed the government.

China last week turned down Ghana’s loan request, explaining that the projects in question “lack financial benefits” and “thus it appears that it’s not appropriate to utilize a Chinese concessionary loan to implement these projects. Otherwise, it may increase the debt burden of your country.”

He explained that they realized that the earmarked roads might not be able to pay back the loan.

“We anticipated it and we said the nation needs to do things differently, that is the essence of our new debt management strategy. I have been saying that we should move away from the situation where we take loans for commercial projects and the projects don’t contribute to resolving the debt which the loans incur,” he noted.

While speaking in a joint interview on the Citi Breakfast Show and Radio Gold, the Finance Minister said it is in line with this that he has been advocating for the “isolation of commercial projects from non-commercial projects and make the commercial projects pay for the loan and the taxpayer pay for the direct concessional loans towards non-commercial projects.”

“Yes, the Chinese are our friends but they are saying, watch your debt figure but what does it mean? We have to change the way we do things, the strategy for borrowing and make these projects pay for the loans.”

Meanwhile, some critics have attributed the cause of the loan denial to the termination of a digital migration contract believed to have initially been awarded to Star Times, which was sponsored by China.

The said contract has since been awarded to KNET, a Ghanaian IT firm.

The Member of Parliament for Okaikoi Central, Patrick Boamah in an interview with Citi News, said he believes the refusal of the loan agreement shows that China is punishing Ghana for terminating the contract with Star Times.

“I strongly believe that it has a relationship with that agreement because the Chinese I know, have protested the way that the contract was terminated and I think government must make a statement on that particular project that KNET won and why a Chinese lost out having gone through an open competitive bidding and we will settle matters from there,” he insisted.