Ghana’s Energy Sector Chokes On Financial Challenges

John Peter Amewu, Minister of Energy, Ghana

Accra, Ghana, June 27, 2019//-Ghana’s energy sector is being choked on financial challenges which are likely to thwart the socio-economic development of the West African country.

This would have dire consequences on the general economy, senior World Bank officials warned at the opening of fifth Mini Grids Action Learning and Summit held in Accra, Ghana.

After three years of prolong power crisis (2014-2016), financial challenges in the country’s energy sector still remain, they observed.

The Outgoing World Bank Ghana Country Director, Henry Kerali, added: “To reach universal access to electricity in Ghana, some challenges are yet to be overcome”.

These challenges he mentioned are:-disparity between rural and urban access which is 85 percent and rural access of 60 percent; increasing cost of access due to geographical distances and low population density; revenue gap between rural and urban; and low productive uses of electricity in rural areas to foster socio-economic development.

Admittedly, Ghana’s Deputy Minister of Energy, Dr Mohammed Amin Adam told journalists at the sideline of the summit said the sales volume of Electricity Company of Ghana (ECG) which was recently took over by Power Distribution Services (PDS) Ghana Ltd, was continued to dwindle.

Growing energy sector debt

The growing energy sector debt, obsolete machines, among others are also some of the challenges the country is grappling with.

In his recent visit to Toronto, Canada, Ghana’s President, Nana Addo Dankwa Akufo-Addo, said that “his government inherited a $5.2 billion debt in Ghana’s energy sector from the previous Mahama-led National Democratic Congress (NDC) administration, half of which was paid, while the remainder hanged on the neck of his administration like an albatross.

“The situation is responsible for the constant power outages, Ghanaians were forced to endure, were from the previous Mahama-led administration”.

However, Adam Mutawakilu, the Ranking Member on Mines and Energy in Parliament reacted to journalists that Mr Akufo-Addo’s statement was inaccurate.

He noted that the Minority did not only find the statements wrong, but also an attempt by the President to shirk responsibility for the poor management of the country’s energy sector, which remained a backbone to the Ghanaian economy.

Mr Mutawakilu argued that in February 2017, when President Akufo-Addo delivered the State of the Nation Address (SONA) to Parliament, he disclosed that “the power sector debt stood at US$2.4 billion at the end 2016.”

Additionally, in June 2017, when the President addressed the opening of the 2017 World Bank Development Finance Forum in Accra, he disclosed that government would soon issue a $2.5 billion bond to offset the legacy debt of the energy sector in order to create space for increased investment.

Mr Mutawakilu therefore challenged the government to make it known to Ghanaians on how the monies raised from the Energy Sector Levy Act (ESLA) were utilised.

He also asked the government to explain how it intends to pay the debt owed the utility providers to provide the required liquidity in the country’s energy sector.

By Masahudu Ankiilu Kunateh, African Eye Report

Email: mk68008@gmail.com

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