By Agency Reporter

Tuesday, 26 Oct 2010

A $13bn Chinese loan to Ghana is good for the African country and does not contravene any agreements with the International Monetary Fund, a senior IMF adviser told Reuters on Monday.

A senior adviser to the IMF African Department, Roger Nord, also said the continent would become the recipient of massive capital flows and challenges would include using the funds productively and managing currency and interest rate volatility.

Ghana‘s loan deal, signed during a visit by President John Atta Mills to China, involves $3bn loan from the Chinese Development Bank to finance Ghana‘s oil and gas infrastructure and agricultural development.

A second deal for $9.87bn was signed with Chinese Exim Bank for road, railway and dam works.

”Investment from China is a big opportunity for sub-Saharan Africa. It is a good thing,” Nord told Reuters.

”Of course as with all such deals, they involve potentially debts that need to be repaid so you need to make sure that this debt is productive, and the investment will generate economic return to repay the debt.

Source: Punch