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Business News of Friday, 7 April 2017


Renegotiate US Millennium Challenge Compact II now - PUWU

The Public Utility Workers Union (PUWU) of the Trades Union Congress (TUC) has called on the government to fulfil its promise to engage key stakeholders in a dialogue on the US Millennium Challenge Compact II (MCC II) agreement before its implementation.

It reiterated the need for the government to review and renegotiate portions of the agreement that it said were not economically favourable to Ghana before implementation, citing particularly the requirement for private sector participation.

Compact II

Ghana and the Millennium Challenge Corporation of the US, in October 2016, signed the second compact agreement worth $498 million.

As part of the agreement, the government is required to enter into a contract with a private sector partner who will have exclusive rights to operate, maintain and invest in the ECG for a stated number of years, beginning January 2017.

The MCC II is aimed at transforming the ECG in terms of technology and efficiency in power distribution to become a stronger company able to meet national needs.

However, stakeholders such as the PUWU and the ECG have called for a renegotiation of some provisions in that compact that they believe are not economically favourable.

News conference

Addressing a news conference in Accra yesterday, the General Secretary of PUWU, Mr Micheal Adumatta Nyantakyi, said the President and senior officials of his government had, on various national platforms, stated the commitment to address all concerns of stakeholders with respect to the compact to promote the interest of the country.

He said that promise was yet to be fulfilled, three months into President Nana Addo Dankwa Akufo-Addo’s administration.

He appealed to the government to ignore alleged remarks by a US envoy to the effect that the country had no option but go ahead with the implementation of the agreement because it was too late to renegotiate.

“The MCC II has provisions for amendments, suspensions, among others,” Mr Nyantakyi said.

Unfavourable provisions

He explained that the union was not against Compact II but was not in favour of some provisions in the agreement that could impact negatively on the operations of the ECG and affect economic development.

He said such provisions included private sector participation in the ECG as a precedent for accessing the proposed US$498.2 million under the agreement to revamp the energy sector and Article 7.1 of the compact.

Article 7.1 of the compact states: “The government will proceed in a timely manner to complete all of its domestic requirements for this compact to enter into force. The parties understand that this compact, upon entry into force, will prevail over the domestic laws of Ghana.”

Another provision, he said, was the handing over of the ECG to a private entity for 25 years and the proposal of a single ECG concession which was tantamount to creating a virtual private monopoly in the distribution of electricity.

“During his vetting, the Senior Minister, Mr Yaw Osafo-Maafo, referred to the compact’s requirement that the government settle its indebtedness before the new investor took over the ECG as unfair and underscored the need for aspects of the compact to be renegotiated,” Mr Nyantakyi recalled.


He said PUWU supported the proposals made by the Senior Minister and contended that paying the indebtedness of the ECG before handing it over was akin to robbing Peter to pay Paul.

“The concessionaire will have no commitment to the social dimensions of ECG operations, which will definitely affect rural electrification and undermine the government’s one district, one factory agenda,” he said.

He said the privatisation of the ECG would cause tariffs to go up, as pertaining in other countries, because an investor was likely to be more profit oriented.