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General News of Monday, 1 April 2019

Source: classfmonnline.com

Power Cuts: 'No money, mismanagement' claims 'absolute balderdash' – Deputy Minister

The claim by some people that Ghana is experiencing intermittent power cuts due to a financially-challenged energy sector is “absolute balderdash”, a Deputy Energy Minister, Mr William Owuraku Aidoo has told journalists at a press conference.

“We have enough fuel, contrary [to claims] that the government doesn’t have money and we are mismanaging the energy sector, that is absolute balderdash”, Mr Aidoo said on Monday, 1 April 2019 at a press conference.

“In a nutshell”, he noted, “All that I am trying to say is that we have taken the necessary steps to reduce to the barest minimum the disruption of power to the country”.

The Deputy Minister also apologised to the people of Ghana for the outages.

“All I will say now on behalf of the Hon. Minister, the President of course, is to apologise to the people of Ghana and to assure you that we are doing all we can to bring the supply of electricity to normalcy.”

Just this weekend, President Nana Akufo-Addo said that except for one or two unfortunate incidents, "we have been able to handle ‘dumsor’", adding that the $2.4 billion legacy debts he inherited from the Mahama government is being cleared, and consequently, “today, we are exporting energy to Burkina Faso, we will begin, again, to Togo.”

Speaking at a town hall meeting with members of the Ghanaian community on Saturday, 30 March 2019 in Worcester, Massachusetts, President Akufo-Addo said the provision of sustainable, reliable power is key to the smooth operation of the bauxite, iron and steel industries that are being created by his administration.

On 28 March 2019, a former Minister of Power, Dr Kwabena Donkor, said Ghana’s energy sector is in “serious financial distress”.

According to him, until the government pumps in the necessary funds to rescue the sector, the intermittent power cuts experienced by customers will persist.

Dr Donkor told Benjamin Akapko on Class91.3FMm’s Executive Breakfast Show that: “Load shedding can only happen today because we may not have money to buy fuel”, stressing: “The energy sector is in financial distress”. “If there were a stronger word than distress, I would use it. Serious distress”.

“The solution,” the Pru East MP said, “lies in getting and pumping money into the sector”.

Painting a picture of the debt web in the sector, Dr Donkor said: “If you look at the performance of ECG, GRIDCo, NEDCo, VRA, their financial performance is deteriorating with every year”.

“In the last quarter of 2018”, he said, “ECG’s losses exceeded GHC1 billion – in a single quarter”.

“The sector is bedeviled by debt. As we sit here, Ghana Gas owes GNPC over $500 million for gas supply because VRA is unable to pay, VRA is the major offtaker, they are unable to pay Ghana Gas. They are unable to pay Ghana Gas because ECG is unable to pay VRA for power generated. ECG owes because its current tariff is not commercially competitive and they are also unable to collect even what ought to be coming to them, especially from the government”.



Dr Donkor also mentioned that the poor performance of the Ghana cedi against the dollar has had a toll on the energy sector.

He explained: “In the power sector, if you take away salaries and wages, about 80 per cent of the payables of the sector is dollar-denominated and yet their receivables are cedi-denominated. So any deterioration in the dollar-cedi relationship impacts negatively on the sector. Since the last tariff adjustment, there’s been massive deterioration of the cedi against the dollar.

“So, automatically [ECG gets worse off], particularly so when PURC, for reasons best known to itself and the government, decided to remove tariffs for domestic consumers, probably in the fulfillment of a manifesto promise. I don’t have a problem because the Ghanaian state is the sole shareholder of these state entities, cash flows should come from operating revenues or capital injection by the shareholder.

“If for any political reason, manifesto fulfillment there’s been this reduction, then please the shareholder has a responsibility to inject capital in the form of equity.

“Last year, GRIDCo had to postpone nearly 80 per cent of all its planned capital expenditure for lack of cash flow and the same goes for all the power sector agencies.

“So, as a people, we own these entities, we cannot eat our cake and have it. We have not placed enough emphasis on efficiency gains – both at the supply end and the demand end. The average Ghanaian household can reduce their power consumption in wattage by about 30 per cent. … So my advice to government is that going forward we should spend money on educating people and improving efficiency at the demand side”, he said.

Dr Donkor, who was minister during the peak of the energy crisis in the Mahama administration, said despite the challenges he faced at the time, he managed to add a substantial generation capacity to Ghana’s power mix.

“It was the most difficult portfolio at the time in the country. Indeed, a good friend of the president’s asked me in Twi when I was appointed, to wit, ‘Kwabena, do you truly believe this man likes you?’ Somebody had to carry the can. It was a difficult portfolio, the circumstances were difficult and Ghanaians had become fed up, so, nobody was prepared to even listen to – excuse my language – rational explanation. And I can understand why: it was a difficult period, but I thank God we improved generation and improved it so well that today we are even being accused of having created excess”, he told Benjamin Akakpo.