Business News of Wednesday, 22 February 2017
Plans by the Government of Ghana under the presidency of Nana Addo Dankwa Akufo-Addo to enlist the Ghana Grid Company (GRIDCo) and the Volta River Authority (VRA) on the Ghana Stock Exchange (GSE) is an answer to the recurrent power crisis, locally termed ‘dumsor’ the country has had to grapple with, Dr Etse Sikanku, a communications lecturer and head of the international desk at Class91.3FM, has said.
According to him, the government sees finance as a major challenge in the sector, rather than power generation, hence the move to enlist the two power producers onto the GSE.
President Akufo-Addo, in his first State of the Nation address to parliament on Tuesday 21 February, mentioned that as part of fixing the problems in the power sector, his government had begun to develop a national electricity masterplan, which will also explore the possibility of listing VRA and GRIDCo on the stock market.
According to him, his predecessor John Mahama left behind a heavily indebted energy sector.
“The attempts by the previous government to resolve the ‘dumsor’ crisis have led to a gargantuan debt overhang in the sector,” Nana Akufo-Addo said.
“We have inherited a heavily indebted energy sector, with the net debt reaching $2.4 billion as of December 2016,” the president said, adding: “I have to point out the alarming fact that $800 million of this debt is owed to local banks, which threatens their stability.
“Huge indebtedness of the energy sector constitutes the single major hurdle to Ghanaians enjoying reliable and affordable electricity supply. The cost of energy destroys businesses large and small. It destroys jobs. It compounds poverty. The current state of the energy situation in our country is unsatisfactory. My government will enforce the procurement law. We will insist on open and competitive bidding for power capacity procurement.”
Speaking on Ghana Yensom hosted by Chief Jerry Forson on Accra100.5FM on Wednesday February 22, Dr Sikanku said: “One of the major ways the NPP has defined the energy problem will be on finance, not really the production.
“He (President Akufo-Addo) says he will list VRA and GRIDCo onto the Ghana Stock Exchange. For me, I think it is to bring more revenue into it and to make it more efficient financially, to bring in more revenue and make it self-sustaining instead of being overly dependent on the government and the banks and then to make them more professional.
“I see this as a policy to help the revenue management and financial health of VRA and GRIDCo so that they will not depend too much on the government. We all know ‘dumsor’ is the most important challenge in the country right now, so the fact that he did that shows that at least he is trying to respond to the challenge. We thought the ‘dumsor’ days were behind us but once a while our lights go off, so we don’t really know the current situation with the load shedding.”