Accra: The International Monetary Fund (IMF) boosted Ghana's non-concessional borrowing limit, paving the way for the West African nation to take $3 billion (Dh11 billion) in loans from the China Development Bank Corp.
The increase, which was approved by the Washington-based fund's board Wednesday, will "provide additional room for scaled-up infrastructure investment," the IMF said in a statement on its website.
A $91.6 million disbursement under an extended-credit facility was also okayed, the IMF said.
The limit was raised from $800 million, according to Deputy Finance Minister Seth Terkper, allowing Ghana to sign the biggest loan in its history and "start disbursements even before the end of this year," he said.
The money will be spent on infrastructure, including natura gas processing plant that will cost about $700 million. Ghana signed a deal with Sinopec International Co to construct the facility, said George Sipa Yankey, managing director of the Ghana Natural Gas Co.
Ghana, the world's second-biggest cocoa producer, became an oil exporter in December 2010 with the start of production at the Jubilee field by companies including Tullow Oil Plc.
Rising debt levels are becoming a concern as the government heads into an election year in 2012, according to Fitch Ratings, which values the country at B+, the fourth-highest junk assessment and one level lower than other African oil producers such as Nigeria, Angola and Gabon.
Finance Minister Kwabena Duffuor pledged to keep the budget deficit at 4.8 per cent this year and next.
There is "scope" for higher borrowing and some of the planned projects "promise significant returns," the IMF said. "A further strengthening of debt management and project appraisal capacities is critical to keep the debt burden manageable."
Ghana's lawmakers will be asked to approve subsidiary agreements today, Terkper said. The $3 billion loan was passed by members of Parliament in August.
- $3b: in loans to be taken from China bank
- $91.6m: disbursement also agreed upon
- $800m: disbursement limit after being raised
- $700m: cost of natural gas processing plant