The $300 million loan facility approved by Parliament for the Ghana Armed Forces (GAF) is in limbo following sweeping economic sanctions placed on Russia by the European Union (UN) and the United States for their involvement in the Ukraine crisis.<\/p>\n
Parliament after much opposition from the Minority in Parliament approved the $300 million loan facility which was sourced from Russian bank, VTB Bank.<\/p>\n
However, due to the conflict situation in eastern Ukraine which is believed to be supported by Russia, EU governments have imposed sanctions on Russia which is targeted at state-owned banks.<\/p>\n
President Barack Obama joined the EU by cutting off three large banks, VTB Bank, Bank of Moscow and the Russian Agricultural Bank from the US economy.<\/p>\n
This means that VTB Bank will in the interim be unable to fulfill its part of the deal by releasing the money to Ghana.<\/p>\n
The loan will be used to secure arms for the nation\u2019s security personnel who are on peace keeping duties in Mali and Sudan.<\/p>\n
The Minority vehemently opposed the approval of the loan stating concerns ranging from due diligence, value for money, and the position of the Attorney General regarding the loan among others.<\/p>\n
A member of the finance committee of Parliament, Dr.\u00a0Mark Osei\u00a0Asibey Yeboah on Eyewitness News<\/strong> disclosed that Ghana has never had any dealing with VTB Bank but the Bank of Ghana could not provide MPs with a report on due dillegence.<\/p>\n <\/p>\n \u201cWhen we asked for a due diligence report from the Bank of Ghana, it was inconclusive. The Bank of Ghana said they couldn\u2019t vouch for the ability of VTB to fully conclude this deal,\u201d he said.<\/p>\n The Member of Parliament (MP) for New Juabeng South,\u00a0said he fears Ghana\u2019s involvement with Russia will have both political and financial risks.<\/p>\n He asked, \u201cwill they be able to fully conclude this deal?\u201d<\/p>\n President John Mahama is in the US to sign an agreement between Ghana and the US government\u2019s Millennium Challenge Corporation (MCC) for the release of 498 million dollars of the second compact of the Millennium Challenge Corporate.<\/p>\n Dr. Asibey Yeboah however believes if US discovers Ghana\u2019s involvement with a state-owned bank in Russia on which there are sanctions, \u201cthere could be implications for us [Ghana].\u201d<\/p>\n He stated that the $498 million will be released in tranches \u201cso in the coming months, if the US sees that we are going ahead with such an agreement, will they hold on to some of these monies?\u201d<\/p>\n According to him, the VTB Bank was not going to be able to pay the full amount agreed on and with the current sanctions, the bank could be cash-strapped therefore, in the coming months, it will be revealed whether the loan agreement will still hold or be aborted.<\/p>\n \u201cIf they don\u2019t have the funds, certainly they cannot disburse\u2026they were part lenders and other lenders were going to give us the rest so now that they have faced some challenges\u2026 I will not be surprised if they write to Ministry and government that they are pulling out,\u201d he remarked.<\/p>\n <\/p>\n By: Efua Idan Osam\/citifmonline.com\/Ghana
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