'Dumsor is a financial problem'

General News of Wednesday, 2 December 2015

Source: classfmonline.com

Power OffFile photo

Dr Mahamudu Bawumia has said the current energy crisis is not a result of inadequate installed capacity, but a lack of financial resources to utilise installed capacity.

Installed capacity in Ghana stands at 2,923.5 megawatts, with peak system demand at 2,200.0 megawatts, leaving excess capacity over demand of 723.5 megawatts.

“Government is highly indebted to VRA and ECG,” he said. According to him, government owes ECG some GHC700 million and owes state power producer, VRA, GH?1.0 billion. “VRA owes its creditors, including Nigeria Gas and West Africa Pipeline Company, a total of $1.3 billion,” he added.

Addressing journalists at a press conference in response to the 2016 budget statement, the economist said VRA’s debt has compromised the balance sheet of the authority and its ability to import crude oil for the generation of power.

“Currently, VRA has shut down a number of its plants because it is unable to purchase fuel to run them,” he alleged.

According to him, Ghana owes Nigeria Gas some US$170 million, which the country is struggling to pay.

“Why is it that after four years of trying, the government has still not found a solution to the problem?” he asked.

In his view, the simple answer is that the government has been in denial and has not prioritised “this issue”. “The government has borrowed $3billion in the last three years from the issue of Eurobonds alone,” he added.

Nana Akufo-Addo’s running mate said President Mahama’s latest comments in Tamale that ‘dumsor’ (erratic power supply) will end before the 2016 elections, exposes the thinking of the government and the president.

In his view, ‘dumsor’ is not an economic issue, but a political issue for the president and his government.

According to him, the NDC cares little about the businesses ‘dumsor’ has collapsed in the past four years. “Rather, their major concern is what can be used come the election year and what cannot be used.”

“Solving ‘dumsor’ clearly has not been a priority these past four years and may only become a priority as we get close to the election,” he said.