Business News of Tuesday, 28 February 2017
Ghana’s energy sector debt is GHS1.3billion not GHS2.4billion as announced to parliament by President Nana Akufo-Addo during his maiden State of the Nation Address, former Deputy Energy Minister John Jinapor has said.
According to the Yapei legislator, a reconciliation of the entire energy sector debt between the Mahama government and the World Bank in November 2016 showed that the net debt is GHS1.3billion and not 2.4billion, which is the “gross figure.”
“No business in this world deals with gross figures because gross figures are nominal,” Mr Jinapor said.
In his view, therefore, “under no circumstance, given the positive stride, given the resilient, robust nature of the energy sector that we [Mahama administration] handed over, should we ever have dumsor.”
The country has been dealing with intermittent power outages over the past week, a situation which has raised fears as to whether Ghana was returning to the days of load shedding.
President Akufo-Addo on Tuesday, 21 February said the Mahama administration left behind a heavily indebted energy sector which needed fixing.
“The attempts by the previous government to resolve the dumsor crisis have led to a gargantuan debt overhang in the sector,” Nana Akufo-Addo told parliament.
“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,” he said.
As part of fixing the problem, the president said his government has begun “to develop a national electricity masterplan, which will also explore the benefits of listing VRA and GRIDCO on the Stock Exchange.”
“My government will enforce the procurement law. We will insist on open and competitive bidding for power capacity procurement.”