Parliament has approved a total of USarmoredllion loan agreement between the Government of Ghana and Israel Discount Bank Limited to finance the supply of armoured vehicles to the Ghana Armed Forces.
The loan is made up of a facility agreement of US$74,120,000 and a commercial loan of US$12,000,000 between the Government of Ghana and Israel Discount Bank Limited.
The terms and conditions of the loan include a facility amount of US$74,120,000 out of which US$68,000,000 is for the contract price and US$6,120,000 is for ASHRA insurance premium, tenor of seven years, grace period of two years, interest rate of six months LIBOR+ 1.15 percent per annum, commitment fees of 0.35 percent per annum, Upfront fees of 0.35 percent per annum and insurance of 8.7 percent flat and financed.
Also, the Commercial loan has a facility amount of US$12,000,000, tenor of 3.5 years, grace period of 0.5years, interest rate of six months LIBOR+ 2.45percent per annum, commitment fees of one percent per annum, Upfront fees of 1.50 percent per annum and insurance of 1.5 percent per annum.
Dr Mark Assibey-Yeboah, Chairman of the Finance Committee, presenting the Committee’s report on the floor of Parliament, in Accra, observed that the object of the loan was to seek approval to enable government to secure funding to procure armoured vehicles and ammunitions for the Ghana Armed Forces.
Dr Assibey-Yeboah also stated that the rationale for the loan was that the current threat of terrorism and other land border threats of neighbouring countries, particularly from the Sahel region, indicates that there was the need for the country, especially the Ghana Armed Forces (GAF) to prepare for any agitations.
He said armoured vehicles play vital role in the work of the army and in recent times, heavily armoured vehicles particularly 6×6 and 8×8 vehicles were used by the army for land operations as they were sustainable for all terrains.
He said unfortunately, these vehicles were in very short supply, thereby hampering smooth operations of the GAF.
Dr Assibey-Yeboah also indicated that the equipment to be supplied consists of nine Infantry Fighting Vehicle (IFV) 8×8 with Unmanned Turret (UT) 30mm, communications packages and 5,000 pieces of ammunition.
The rest are ten IFV 6×6 with Reconnaissance system including Remote Control Weapon System (ORCWS) 12.7 and communication package.
Mr Richard Acheampong, MP for Bia East, emphasized the need for value for money in relation to the purchase of the armoured vehicles to the GAF.
He said the quality of the equipment being procured should be able to stand the test of time, so that the personnel of the GAF can use them for their operations.
Mr Seth Acheampong, Chairman of the Defence and Interior Committee, said that the current threat of terrorism and land border threats from countries especially the Sahel region compels the country to adequately position itself to handle such global security challenge.
He said the logistics of all types played a pivotal role in the operations of the military to guarantee peace and security.
He said attempts to acquire more armoured vehicles to augment the existing fleet of the GAF and replace obsolete ones have failed due to the cost of purchase, maintenance and training for their use.
Mr James Agalga, Ranking Member on the Defence and Interior Committee, stressed the need for the country to retool the GAF to defend the territorial integrity of the country especially at time when there are several domestic threats such as terrorism among others.
He said though the procurement about to be made is in the best interest of the country however there is the need to ensure value for money.
He reveled that the GAF intends to establish two new Armoured Unit and Training Schools in Sunyani, in the Bono Region and Tamale in the Northern region.