Your figures on cost of electricity subsidy are wrong – Govt replies policy think tanks

Information Minister, Kojo Oppong Nkrumah has dismissed figures put out by energy think tanks, the Africa Centre for Energy Policy (ACEP) and the Institute of Energy Security (IES) regarding the cost of the electricity subsidy as announced by President Akufo-Addo in the wake of the COVID-19 outbreak.

ACEP has estimated that about GHS3 billion will be spent by the government following the cut in electricity tariff constituting about GHS2.7 billion in tariff and about GHS300 million in Value Added Tax (VAT).

ACEP said if the government fails to honour its obligations, the sector’s financial situation will worsen.

In a statement on the electricity subsidy, ACEP said the policy also further deepens the budget deficit, which is estimated to be about GHS9.7 billion, adding: “If the government intends to add GHS3 billion from the power sector, it will require another revision of the fiscal numbers presented to Parliament”.

“The Power sector is reeling in debt, with no end in sight for debt accumulation. The current outstanding debt to Independent Power Producers (IPPs) stands in excess of US$1billion. Last week, Government had to intervene to pay for unpaid gas utilized for power generation to the tune of US$100 million to avert a calamitous action by the OCTP pertness to drawdown on World bank guarantees for the projects”, it emphasised.

Explaining further, it said: “This picture is gloomy enough, without exhausting all the challenges in the power sector, for careful consideration of actions that further worsen the financial sustainability of the sector.”

Similarly, the IES expressed same concerns. Saying the subsidy will further plunge the energy sector into mire debts.

But speaking on Accra-based TV3 Wednesday April 15, Mr Oppong Nkrumah said the figures are inaccurate.

“We very much respect the work that CSOs like ACEP and IES are doing. The figures I have seen are not the figures they are putting out, theirs are way high. Their figures are not accurate

“Tomorrow morning the Minister will go through all of these but those figures by IES and ACEP are not correct,” he said.