Ghana's chances of accessing a $150 million loan from VTB Bank in Russia to facilitate the deployment of troops for a UN Mission have been blighted by European Union and US sanctions on Russia.
Under a work lease system, Ghana was to pre-finance the cost to be incurred in contributing the troops and equipment for the UN Mission and was counting on Russia's VTB for support. The bank was to raise $150million for the Ghana government with the remaining $150million to be solicited from other sources.
However, Bloomberg reports that attempts by the second largest Russian Bank to access a $1.5 billion loan from a US bank, out of which $150 million would be given to Ghana was turned down due to US sanctions on Russia.
Russia has been sanctioned by the US and the EU following conflicts between the European country and its neighbours Ukraine. But that sanctions on Russia appear to have affected Ghana's chances of securing the $150 million for its work lease system.
The loan facility which was approved three weeks ago by Ghana's Parliament was not without controversy.
The minority had raised concerns about the cost of the loan.
Dr Mark Assibey Yeboah said the agreement "does not make any sense under current international credit conditions. We are confronted with upfront fees of $5.5 million and management fees of $6million.
"If you put the two together [upfront and management fees] that is $11.5million. Without mincing words that is chop money for somebody and his friends.
"This facility is a fraud being perpetrated on the Ghanaian people. I will not be part of this. We will not be part of this.
The Bank of Ghana in a letter to Parliament also said it could not vouch for the loan, because it believed the Russian Bank was not in the position to provide the amount.
The Attorney General also raised issues with the loan agreement.
Per a letter addressed to the Ministry of Finance, the AG advised the Finance Ministry to review the interest on the loan.
The letter authored by Amma Gaisie, Solicitor General, asked the Finance Ministry to proceed to the Debt Management Division of the Ministry of Finance to seek appropriate advice.
Chairman of the Finance Committee of Parliament, James Avedzi at the time rejected the suggestions and concerns raised by the three institutions and Parliament went ahead to approve the loan.
The minority after describing the loan agreement as fraudulent abtained from voting on the agreement.
With the latest Bloomberg report about the inability of VTB to raise the $1.5 billion, concerns have been raised about whether Ghana did due diligence before going in for the loan.
James Avedzi said he "cannot tell if they [VTB] will give us the money" adding if they are unable, the country will look elsewhere for help.
He dismissed assertions that the government was warned not to proceed with the loan agreement with VTB.
He said Bank of Ghana's intervention was only a "banking language" and not a warning.
Meanwhile, the Minority in Parliament insists there are financial and political risks associated with the loan.
Dr Mark Asibey Yeboah said with Ghana heading for over $500million from US under the Millennium Challenge Compact, it will be suicidal for the West African country to be dealing with Russia at the same time.
He said the political risks are far more precarious.