Business News of Tuesday, 21 February 2017
The Ex-deputy Power Minister John Jinapor has said the erstwhile National Democratic Congress was on track to clear the energy sector debt which stood at $2 billion just before they handed over power.
Jinapor said the Mahama led administration put in place better reforms including the imposition of the energy sector levy as a master plan to reducing the suffocating debt in the sector.
He was responding to the president’s state of the nation address, Tuesday, during which the president characterised the energy sector as highly indebted.
The country has been recovering from a paralytic power supply in four years which dealt a heavy blow on businesses and the general economy.
The president said attempts by his predecessor to resolve the power crisis led to “a gargantuan debt.”
“We have inherited a heavily indebted energy sector with the net debt reaching 2.4 billion dollars as at December 2016,” he said during the State of the Nation Address.
According to him, $800 million of this debt is owed to local banks which threatens their stability and that of the whole financial sector.
While he will not dispute the fact that the energy sector is heavily indebted, the former Deputy Power Minister John Jinapor in an interview on Joy News said Nana Akufo-Addo should also have focused on the assets and not only the debt.
He said a special purpose vehicle was set up by the Mahama led administration to clear the debt and free the sector for take off.
“These were necessary interventions,” he suggested, adding they had put together 12 banks with the LCs that will help raise monies for the effective administration of the sector.
He wondered how government was going to defray the debt owed by institutions in the energy sector when it has promised to do away with some taxes and levies.
He did not understand why president Akufo-Addo gave the impression that his government was going to reduce the levies when their initial promise was to scrap them.
“The promise is not reduce. They said they will scrap it. it appears there is a shift in the goal post; the energy sector levy is 10% of what we consume. We will see whether they scrap it or significantly reduce it,” he stated.
But the Energy Minister Boakye Agyarko told Joy News the significant point is to mitigate the suffering of Ghanaians and that is what the Akufo-Addo led government will do.
He suggested that the point about whether the government promised a reduction or scrapping of the taxes was irrelevant.
“The levy is not one. It is a composite of levies. Some will be reduced others will removed,” he stated.
When asked which of the taxes were either going to be reduced or scrapped, he said on March 2, 2017, the Finance Minister will provide the details on that.
With some areas of the country still experiencing power outages popularly called dumsor the Energy Minister was quick to debunk assertion that there is load shedding in the country.
Even though he conceded there were some problems with gas delivery in respect of the FPSO gas supply which affected the performance of the Ameri plant, he stated that “so far there no load shedding. It is localised problems at the ECG system.”
“We have sufficient crude for generation; contracted sufficient import of power from Ivory Coast,” he stated.