The Minority in Parliament has challenged President Nana Addo Dankwa Akufo-Addo to provide further and better particulars on his claim that the erstwhile National Democratic Congress (NDC) government handed over a debt of $5.2 billion in the energy sector to his administration.
It again asked the government to account to Ghanaians how the money raised from the Energy Sector Levy had been utilised.
Speaking at a press conference in Accra yesterday, the Ranking Member on the Mines and Energy Committee, Mr Adam Mutawakilu, also urged the President to explain to Ghanaians how the government intended to pay the about $2.3 billion debt owed the utilities to provide the required liquidity in the sector.
He said the President had often made inaccurate claims about the debt in the energy sector in a bid to conceal the true state of affairs.
Mr Mutawakilu said one of those inaccurate claims was during the President’s recent visit to Toronto, Canada, where he said that his “government inherited a $5.2-billion debt in Ghana’s energy sector from the previous John Mahama-led NDC administration, half of which has been paid” while the remainder hung on the neck of the administration “like an albatross”.
He said President Akufo-Addo claimed that “the situation is responsible for the constant power outages which Ghanaians were forced to endure from the previous Mahama-led administration”.
In line with those assertions, Mr Mutawakilu said: “The Minority Caucus in Parliament has become very alarmed at the ever-rising and crippling debt in the energy sector, over which President Akufo-Addo has failed to level up with the people of Ghana. At various fora, the President has sought to mislead the public about the exact state of affairs in the sector.
“The Minority does not only find these statements as inaccurate but also an attempt by the President to shirk responsibility for the incompetence he has displayed in the management of the country’s energy sector, which remains a backbone to the Ghanaian economy.”
‘Facts’ on energy
Mr Mutawakilu, who is the NDC Member of Parliament for Damango, said President Akufo-Addo stated in his February 2017 State of the Nation Address (SoNA) to Parliament that “the power sector debt stood at $2.4 billion at the end of 2016”.
He said at the opening of the 2017 World Bank Development Finance Forum in Accra in June 2017, the President disclosed that the government was going to issue a $2.5-billion bond to offset the Legacy Debt in the energy sector in order to create space for increased investment.
Therefore, the NDC MP said, the Minority Caucus was unable to accept the President’s claim of a $5.2-billion energy sector debt created by former President Mahama during his tenure.
Rather, he said, the Legacy Debt of approximately $2.4 billion was a debt accumulated by successive governments between 1992 and 2015 and indicated that $250 million out of the $2.4 billion was paid to banks by the Mahama-led government in 2016 to ease the liquidity crunch.
“As of the end of 2016, the energy sector debt was approximately $2.2 billion. On the exit of President Mahama, the $2.2 billion amount was certified and agreed to be settled within three to five years, starting from 2016, with the passage of the Energy Sector Levies Act 2015, Act 899 (ESLA).
“There was a term-sheet of $600 million to pay off suppliers, but this was delayed by President Akufo-Addo for more than a year. Government rakes in approximately GH¢3 billion ($590 million) annually from the ESLA Fund,” he said, adding that “President Akufo-Addo inherited a ‘dumsor-less’ economy in January 2017”.
Energy sector debt overhang
Mr Mutawakilu said at the end of 2016, almost all the state-owned enterprises (SoEs) in the energy sector reported profits, showing a strong sector performance.
However, he said, at the end of 2018, all SoEs in the energy sector reported losses, a clear sign of a weak sector performance, emphasising that at the end of 2018 the financials of those power sector entities had deteriorated, making it difficult for them to operate efficiently.
“The growing debts in the books of the utilities contribute to a large extent the ‘dumsor’ we are currently experiencing. The government’s debt to these entities is adding gargantuan liabilities to the existing Legacy Debt over a period of two-and-a-half years,” he said.
On the government’s indebtedness to the power sector entities, the MP said the government owed Karpower $150 million; ENI, $160 million; the Northern Electricity Distribution Company (NEDCo), $162 million; independent power producers (IPPs), $1 billion; the Ghana Grid Company (GRIDCo), $171 million, and Ghana Gas, $735 million.
He urged President Akufo-Addo to take responsibility and address the liquidity and operational challenges in the energy sector, instead of carrying on with his blame game.
Mr Mutawakilu asked the President to show clearly how he intended to revive entities such as the Tema Oil Refinery (TOR) and the Bulk Oil Storage and Transportation (BOST) Company Limited which were fully operational when former President Mahama handed over to him in January 2017.
He again urged the President to explain to Ghanaians how his government had only colossal debts to show, despite the unprecedented huge receipts from taxes and other revenue sources, including revenue from oil, in the country’s history.
“The Minority wishes to assure President Akufo-Addo that it will expose any attempt to deceive Ghanaians and cover up the incompetence displayed in the governance of the country which has brought untold hardship on poor citizens.
“We further put President Akufo-Addo’s government on notice that any misapplication of the ESLA inflows will be resisted by all means possible under the laws of Ghana when former President Mahama takes over government on January 7, 2021,” he said.