The Chinese government has refused a loan application by the government of Ghana for the construction of some three road projects.

In a letter dated June 26, 2015 addressed to the Finance Minister Seth Terkper and intercepted by Joy News, the Chinese government says the road projects in question are not viable enough for them to sponsor.

The government of Ghana had applied for a loan from the Chinese government to help it construct the Accra Outer ring road project; the Mankessim-Agona Swedru-Nsawam Road Re-construction project and the Dodowa-Kpong & Somanya Akuse Junction Road Re-Construction project and four others.

But in a reply the Chinese government says its concessional loan facility cannot be used to finance projects which do not have good financial benefits.

"Having studied the documents for the above projects, we would like to advise you that, according to the current guidelines by Chinese government, the Chinese government concessional loan and preferential buyer credit are mainly directed towards projects with good financial benefits and repayment abilities," Mr Ji Chun Regional Director of the Chinese government said in a reply to the loan application.

"According to the relevant documents, these three road projects lack financial benefits , thus it appears that it's not appropriate to utilize a Chinese concessionary loan to implement these project,Chun added.

Mr Chun said the loan is likely to increase Ghana's debt burden if the Chinese government were to approve it.

"Therefore regarding these three projects, we suggest that your Ministry take other financing resource into consideration," the letter said.

Ghana's public debt has hit 89 billion cedis with fears any more debt could plunge the country back into HIPC.

Government, having recognised the unsustainable levels of the loan repayment regime is exploring other alternative means to manage the debt profile.

It has always trumpeted smart borrowing as one of its key agenda in managing the debts but with the response of the Chinese government it does not appear the loan application for these road projects is a smart one.