9 October 2018

Ghana: Review of Power Purchase Agreements Govt Saves U.S.$7 Billion - President

President Nana Addo Dankwa Akufo-Addo says his government, over the last 21 months, has ensured stability in the supply of power in the country.

Speaking at the Financial Times Africa Summit in London yesterday, President Akufo-Addo indicated that his government had ended the erratic power situation, which earned the name "dumsor," inherited from the previous government.

Additionally, he said his administration had ensured a reduction in tariff rates, with domestic consumers enjoying tariff reductions of up to 17.5 per cent, and a 30 per cent reduction for industry to stimulate industrial activity.

"In addition, a review of 24 power purchase agreements, which has led to the termination of 11 power deals and the rescheduling of eight others, has enabled us to save the government treasury about $7 billion in excess capacity charges over a 13-year contract period," the President said.

He told the forum that his government had issued a 7-year and 10-year cedi-denominated bonds, totalling GH¢4.7 billion, which had halved the $2.4 billion energy debt it inherited.

"Ghana, as a result, is today a net exporter of electricity. I was in Ouagadougou, capital of Burkina Faso, last Friday, for the inauguration with the President of Faso, His Excellency Roch Marc Christian Kabore, of the Bolgatanga (capital of Ghana's Upper East Region) to Ouagadougou Power Interconnection Project, which will see, daily, up to 100 megawatts of power supplied directly to Burkina Faso from Ghana," he added.

After 25 years of a stable and free, democratic nation, with a strengthening market economy, President Akufo-Addo indicated that Ghana, today, had the best opportunity, since independence, to undertake a deliberate and meaningful transformation of its economic structure.

As a relatively new entrant in the league of oil-producing countries, President Akufo-Addo indicated that Ghana had the perfect occasion to transform the structure of its economy through industrial and value-added commercial activities.

"We are determined to use our oil revenues to create assets, not waste it on consumption and accumulate debt," he said.

Additionally, President Akufo-Addo told the forum of his government's desire to develop strategic industries out of Ghana's abundant natural resources of bauxite and iron ore.

"We have established, by statute two months ago, a public commercial corporation, the Ghana Integrated Bauxite/Aluminium Development Corporation, to assemble the relevant financial resources for the full exploitation and development of the entire value chain, in Ghana, of our large bauxite deposits," he said.

By the same token, President Akufo-Addo indicated that "we have decided to exploit our substantial iron ore and manganese deposits situated in the Western and Northern regions of our country, to build an integrated steel industry to serve the needs of our country and region. We are seeking suitable partners for both ventures."

The President gave the assurance that his government would ensure that businesses were up and running, having access to the capital, and, at the same time, maintaining macro-economic stability, an efficient bureaucracy, a strong adherence to the rule of law, and a fair and equitable social system in health and education provision.

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