Business News of Saturday, 25 February 2017
President of IMANI Africa, Franklin Cudjoe has cautioned the Akufo Addo government to urgently resolve issues with the Compact 2 agreement of the Millennium Challenge Account or face a possible withdrawal of the funds by the Trump administration of the US.
His comments come after President Akufo-Addo announced during his maiden State of the Nation address earlier this week that his government will undertake a possible review of the agreement.
The Compact 2 which contains the Ghana Power Compact has $498.2 million to be used to fight poverty by transforming the country’s energy sector.
The five-year compact, the largest U.S. Government transaction under Power Africa, is also expected to stimulate billions of dollars in private energy investment.
But speaking on The Big Issue on Saturday, Franklin Cudjoe said, the government should act quickly to make sure that the country does not lose the money.
“the MCCA, if we joke and Trump gets to hear that an African country is sitting somewhere and they have $500 million free money to restructure the energy sector, he will withdraw it.”
“Some will ask, is it free money? Of course not, if the economy works well, for geopolitical purposes, they are happy so you don’t want to be seen as there must be a direct benefit before you say there must be something bigger than this.”
“Don’t forget for the first compact we did well and it was useful. Very purposeful intervention. Given the current situation in America where you have a no-nonsense president who is looking into ways and means to create jobs for America [we shouldn’t be seen to be further delaying],” he said.
Compact 2 agreement signed
Ghana and the Millennium Challenge Corporation (MCC) of the US government in October 2016 signed the second Compact worth $498 million.
The agreement brought to total $1.4 billion received by the government to be injected into the country’s energy sector and among other specifics make the Electricity Company of Ghana more efficient.
Some staff of ECG expressed fears they would be laid off amidst rumours of the privatisation of the company, but the Chief Executive of the Millennium Challenge Corporation (MCC), Dana Hyde in an interview insisted that the company will not be privatised but be strengthened to work more efficiently.
She added that key elements of the private sector participation in the ECG will not result in electricity tariff hikes and the transactions guaranteed jobs for five years.