By Leo Nelson
Ghana’s President, John Dramani Mahama, has given a resolute pledge to wipe out the country’s mounting energy sector debt by the year 2026, assuring citizens that his leadership is dedicated to addressing the current GH¢80 billion financial burden.
Speaking at the prestigious Africa CEO Summit in Abidjan, Côte d’Ivoire, President Mahama laid out a robust strategy aimed at steadying the sector and reinvigorating the confidence of investors.
Highlighting the urgency of the situation, President Mahama declared, “Upon my re-election, we were faced with a disarrayed energy sector grappling with debts totalling almost 2.5 billion owed to Independent Power Producers and gas suppliers. This needed urgent attention.”
With a clear acknowledgment of the troubles stemming from past arrears left by the former administration, Mahama vowed to steer a targeted and pragmatic course of action. The President ensured that renegotiations and strategic debt management will be at the core of their approach.
He asserted, “By this year’s end or early next year, we envision a resolution that will satiate all parties while dealing with this debt.”
Furthermore, pointing out the inefficiencies in the revenue collection system, especially within the Electricity Company of Ghana (ECG), the President underlined the need for a systemic overhaul.
Mahama stated, “Efforts are ongoing to revamp the revenue collection mechanisms, particularly by engaging the private sector in billing and metering services to boost efficiency and cut down on losses in distribution.”
In a significant move to ensure equitable sharing of revenues, the reintroduction of the Cash Waterfall Mechanism has been put in place by the government. This mechanism guarantees a fair distribution of ECG’s income among all power producers.
Mahama criticized past discrepancies in adhering to this essential mechanism, emphasizing, “We have now reinstated the Cash Waterfall Mechanism to ensure every entity involved receives their due monthly share.”
In the drive for broader sector reforms, Mahama revealed strong interest from private investors looking to tap into Ghana’s energy landscape. However, he highlighted the importance of a transparent and inclusive privatization process.
He asserted, “Local participation is non-negotiable in this sector’s advancement. Regardless of international interests, there must be collaboration with local entities.”
As Ghana’s energy sector undergoes transformative reforms prioritizing debt resolution and enhanced efficiency, the nation’s ambitions lie in bolstering investor faith and ensuring long-term sustainability.
With the adoption of private sector engagements, reinstated financial structures, and targeted reforms, Ghana aims to navigate towards a future of fiscal stability and energize the distribution network.
As Mahama’s administration steers the nation towards a landscape of cleared debts and bolstered revenue streams, the journey ahead promises a roadmap to secure Ghana’s energy future.