Government is denying claims by the Minority that a $2 billion bauxite deal between the Government of Ghana and Chinese company Synohydro is a loan.

The Minority had said government was being insincere about its account of the deal and has written to the International Monetary Fund (IMF) to clarify the issue.

Bolgatanga MP Isaac Adongo speaking on Joy FM’s news programme Top Story, said everything in the deal shows that the agreement is a loan and that government is simply playing with words.

He is convinced that the agreement is a loan government would have to repay but is failing to be transparent on the deal and is certain that the IMF investigations will reveal government’s dubious dealings in respect of the agreement.

“We are quite clear that at the end of the day it is not how you describe it, it is just a clever accounting procedure that you want to use to circumvent what truly the transaction is.

“The transaction that is a barter has interest component, has processing fees and I cannot see how you describe this as barter. There isn’t anything like barter, this is clearly a loan that you’re trying to find a way to escape your responsibility to stay within a certain limit under the extended credit arrangement,” he said.

Mr Adongo believes the transaction will have far-reaching consequences for Ghana

Mr Adongo believes IMF’s clarification is the only truth they will stand by at the moment, they don’t trust that government is being truthful.

He believes the agreement as it is will have far-reaching future consequences based on future volatility and “additional cost implication for Ghana to be able to set up a refinery and be able to deliver its value.”

But Information Minister designate Kojo Oppong Nkrumah says the claims are inaccurate.

This is not a matter for the IMF to determine, they may have an opinion, he said.

He added that “it is not about the Fund determining. This is not a law court for the Fund to determine. They are asking the fund to express an opinion and literally to the transaction which we disagree.”

He further clarified that there are no interest and processing fees on the government of Ghana as the MP claims.

“The interest and processing fees that you see in the document are those that Synohydro incurs on their financing side,” he explained.

Related: $2bn bauxite deal: Fitch predicts political risks for gov't

On global financial analyst Fitch’s prediction that Ghana is likely to face risks from its $2 billion bauxite deal with the Chinese, the Minister-designate said forecast is not different from what government did before going into the transaction.

The report dated August 28, 2018, predicts a dire situation for the country if the value of bauxite takes a dip.

 Mr Oppong Nkrumah said government has long taken all that into consideration and has put in place measures to mitigate these risks.

“The risks that they outline here are not very different from some of the risks we envisaged and what informed our risk mitigations measures,” he said.

In a response to the problems that may arise as a result of the price fluctuations on the world market, the Ofoase Ayirebi MP, said the instability is one of the risks government flagged during its deliberations on the transaction.

Related: Parliament approves $2bn Ghana-Sinohydro infrastructure agreement

And the government has opted to address the problem by paying with higher value chain products.

He explains, “Indeed prices of bauxite currently hovers between 30 to 44 dollars per metric tonne, if you refine it to alumina it moves up to about 450 to 600 dollars if you move it up to aluminum proper, you are getting 2000 dollars per metric tonne and indeed if you go further downstream into ingots and profiles we could get up to about 6000 dollars.

We have put in place a structure that allows us to refine from bauxite to alumina to aluminum and today as we’re working with VALCO even to go further into ingots and profile. You get more value apart from the creation of jobs that come in to pay down on your obligations,” he added.