The Minority in Parliament has suggested an alternative to the STX Deal, under which a Korean Company would construct 30,000 housing units for the Security Services, saying it does not make good economic sense.
Addressing a press conference at the Headquarters of the New Patriotic Party (NPP) in Accra, Mr Osei Kyei Mensah-Bonsu, The Minority Leader, said the 1.5 billion dollars loan would have serious implications for the country, especially when viewed from the context of Ghana's ability to pay the yearly 100 million dollars to service it and called for its revocation.
The Minority walked out on August 3, 2010 when the STX deal was sealed in Parliament.
Mr Mensah-Bonsu said he was wondering if the country had the ability to make the payment in a single transaction relating to a department in one Ministry and noted that the implication for Ghana, whose debt sustainability level stood at 27 per cent of its export, was not the best as the country's debt level would become unsustainable if the agreement were allowed to go through.
"The 1.525 billion dollars will shoot the debt sustainability threshold to over 35 per cent of the nation's export," he said.
Making reference to a study conducted by Nankani and Allen in 2004, the Minority Leader said if a country's debt sustainability threshold exceeded 25 per cent of its export its economy would be heading towards the wrong direction.
"It is instructive to know that Nankani, who so postulated, is a Special Advisor to President John Evans Atta Mills, who sent this agreement after Executive approval to Parliament," he said.
He noted that as at the end of 2009 the Government owed about one billion dollars to Contractors, including statutory payments to the Ghana Education Trust Fund (GETfund) and some other organisations arguing that if the county could not make these statutory payments, "how can we think of making discretionary upfront payment on one single transaction".
Mr Mensah-Bonsu suggested to the Government to complete the 5,500 affordable houses which were started by the New Patriotic Party (NPP) Government and were at various stages of completion.
He said this could be done by locally borrowing a few million Ghana Cedis, adding that when completed all could be allocated to the security agencies and the areas declared security installations - barracks.
He called on the Government to in the medium term to come to Parliament to lay a Security Service Housing Fund Bill and pay the over 100 million dollars needed to service the 1.5 billion dollar STX loan every year for 20 years into the Fund and use the it to build houses for the Security Services.
"With these alternatives we do not mortgage the country to Korea. We will use local contractors; we will use local materials; we will employ 100 per cent Ghanaians; men and women in uniform will get their houses in the barracks and elsewhere," he noted.
Mr Kyei- Mensah-Bonsu appealed to President Mills that if for whatever reason the Government intended borrowing from the Koreans at all cost, it should be scaled down to manageable size for the sake of the fragile economy of the country.
He called on the Government to reserve the borrowing of such huge amounts to projects that could pay for themselves such as the building of dams; constructing other energy generation systems; transmission and distribution facilities; processing of bauxite and other minerals.
Ms Cecilia Abena Dapaah, a Minister in the erstwhile NPP Administration, said the average size of the buildings was two bedroom units, for a price of 50,000 dollars, which she described as very expensive compared to the cost of the affordable house started by the NPP Government that were priced 20,000 dollars.
The STX Housing Project is a joint venture agreement between the Government of Ghana and STX Engineering and Construction Ghana Limited and HFC Bank Ghana Limited under which 200,000 housing units would be constructed in 10 cities and towns in the country over a period of five years.