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Nov 26, 2019

Ghana is moving forward with an environmentally-risky resources-for-infrastructure deal with the Chinese state-owned construction conglomerate Sinohydro. According to the agreement, Ghana will provide 5% of its bauxite reserves to Sinohydro in exchange for a $2 billion package of infrastructure that includes roads, bridges, power plants and oil refineries.

While Ghana's need for infrastructure is understandable, critics contend that this deal is too just dangerous as it threatens the water supply of up to 5 million people. Most of the bauxite that the Chinese will mine is located in the pristine Atewa Forest Reserve in eastern Ghana and is internationally recognized as one of the most important ecosystems in West Africa.

The two governments, though, appear determined to proceed regardless of the potential environmental consequences. China recently released the initial tranche of $649 million as part of the deal indicating that both mining operations and construction will start soon.

Emmanuel Amoah-Darkwah, an Accra-based economist and market analyst for IHS Markit, is closely following the deal and joins Eric & Cobus to explain why he thinks it's just too risky.

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