China National Building Materials Corporation will issue a US $400m loan to Ghana to support the Ghanaian government’s establishment of 22 factories under the “One District One Plant” initiative, and China Construction will mainly focus on these plant projects.
The implementation provides equipment and machinery. It is reported that the Chinese government is obtaining credit loans from major financial institutions in China, so that the “one district, one factory” policy will be implemented smoothly.
Currently, at least four local banks in Ghana have been selected as intermediaries between Chinese entities and local merchants to implement these projects. The loan will be used in 22 projects in all 10 provinces of Ghana, which will include the production or processing of starch, clothing, soy, soy milk, diapers, alcohol, corn and rice.
As part of the agreement, CCT will provide equipment and machinery, and local financial institutions, including Ghana’s National Investment Bank, General Commercial Bank, Agricultural Development Bank and Barclays Bank, will facilitate the payment of loans to investors.
Memorandum of Understanding
To consolidate this partnership, the Ghanaian government, Chinese companies and financial institutions signed an agreement and a memorandum of understanding at a ceremony in Accra on Wednesday.
The ceremony was attended by Ms. Gifti Orn-Konado, National Coordinator of the “One District, One Factory” Secretariat of Ghana, Dr. Poku Adusei, Director of the Ghana Bureau of Standards, and senior officials of the Ministry of Trade and Industry.
It is reported that the “One District One Factory” initiative initiated by the Ghanaian government on August 14, 2017 is part of the industrial agenda to ensure that at least one factory is set up in each of the 216 counties (districts).
So far, investors have submitted 700 business plans to the “One District, One Factory” Secretariat, of which 602 have been reviewed and 313 have been designated as guarantee able or viable projects.
In response, the Minister of Trade and Industry of Ghana said: “The signing of these agreements paved the way for the import of equipment and machinery. These loans have six months of rates payable and 2.8% interest.”
He said: “I want to reiterate that we will do everything we can to ensure that these factories are built in accordance with government commitments, because we believe this policy will help expand the rural economy and prevent population from moving from rural to urban areas.”
President Chen said that China Construction is ready to provide the necessary equipment and machinery to successfully implement these projects. He said the company will work with stakeholders and the Ghanaian government to overcome the challenges that may be faced in project implementation.