Finance Minister Ken Ofori-Atta

The $750 million African Export-Import Bank (Afreximbank) Loan has finally hit the Bank of Ghana’s (BoG) Account.

Documents sighted by Joy Business showed that the swift advice came in tranches to hit government’s account with the Central Bank.

The said transfer came in yesterday (25th August, 2022) afternoon.

Government is primarily looking forward to use this money to finance some infrastructure projects.

However, the Bank of Ghana will take the dollars and give the cedi equivalent to government.

This will go a long to boost the Central Bank’s reserves, a move that could help slow down the rate of depreciation of the cedi against the dollar. 

Details of the facility

The facility was disbursed in Three Tranches. Two denominated in US dollar and One in Euros.

US$187 million, 193 in Euros and US$332 million.  Government is expected to enjoy a 3 year Grace Period or Moratorium for the facility.

However, the US$187 million and 193 million Euros will have a tenor of 7 Years.

US$332 million will have a tenor of 10 years.

Sources say Government in August, executed facility agreement and met all the condition precedent for the disbursement.

The utilization request was signed in August as government received SWIFT confirmation of the successful transfer of funds into the BoG designated accounts on August 25 2022.

Utilization of the funds

Government is targeting about 15 capital projects that it plans to use the AFRIXEM loan to finance.

 1 Ofankor -Nsawam Road Project

2 Ejisu- Konongo Road Project

3 Completion of Nsawam Apedwa Road Project

4 Suame Interchange and Local Road Network Project

5 Completion of Flower Pot Interchange, East Legon, Accra

6 Completion of Sofoline Interchange Project

7 Construction of Kwabenya – Peduase Road project – GoG Counterpart Funding

8 Completion of Eastern Corridor Lot 5 and 6

9 Construction of Enkyikrom – Adawso Road Project

10 Sports Projects -Construction of Stadia and Sports Infrastructure for the All-African Games 2023

11 Railway Projects- Purchase of Rolling Stock and Spare Parts

12 Agenda 111 – Partial Funding

13 Construction of 37 Hospital Project – GOG Counterpart Funding

14 Purchase of 112 Ambulances – GOG Counterpart Funding

15 Energy Projects – Transmission, Power Outage Reduction and Network Improvement Project

Background

On 20th July 2022, Parliament at its 31st  sitting of the Second Meeting of the Second Session, approved by resolution the Loan Facility Agreement between the Government of Ghana (represented by the Ministry of Finance) and the African Export-Import Bank (Afrexim bank).

The move was influenced by challenges in securing funds from the capital market due to downgrade by all the major ratings agencies

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