Paper short abstract:

This paper analyses Sino-Ghana relations, using the bauxite-for-infrastructure deal signed in 2018 as a case study. It uses qualitative approach, and strategic partnership as a guiding framework. It evaluates the benefit-cost trap based on competitive-cooperative interests of both parties.

Paper long abstract:

Ghana and China have historically used state-to-state deals to reinvent and deepen bilateral relations since the 1960s. One of such partnerships is the Master Project Support Agreement that was signed in 2018 with Sinohydro Corporation. In this deal, Sinohydro, a China state-run hydropower engineering and construction firm will construct priority infrastructure projects for Ghana in exchange for mining bauxite at the Atewa forest located in the Eastern Region. This research paper evaluates the benefits and traps of the Agreement for Sino-Ghana relations. It uses qualitative research approach, involving archival, historical and qualitative analyses, complemented by semi-structured interviews and media reports. The discussion is framed around the theory of strategic partnership and explores the mutual cooperative-competitive interests of both parties. Preliminary findings show the Atewa forest sits on a 26,000-hectare land with more than 900 million metric tonnes of bauxite, manganese and iron combined and valued at more than US$500 billion. Sinohydro is to mine at least 5% of this wealth for 15 years in exchange for constructing the priority projects. The projects will cost Sinohydro about U.S.$2 billion which is also part of a US$19 billion loan granted to Ghana by China. Ghana will pay back the loan with refined aluminium instead of money which suggests China acted more smartly than Ghana since money loses value, unlike aluminium which is likely to rather appreciate. The paper concludes by reflecting on these concerns while showcasing the cost-benefit trap of the deal for Sino-Ghana relations.