President John Dramani Mahama, has mentioned that the mismanagement of Ghana’s energy sector by the previous administration, has caused some independent fuel suppliers to threaten to cease their operations in Ghana.
He made the claim while delivering his first State of the Nation Address on Thursday, February 27, 2025.
He stated that the previous government, despite having accumulated over 45 billion Cedis of returns in the energy sector, the country still has a debt.
“Mr. Speaker listen to this. Despite collecting over 45 billion cedis in energy sector levies, ERSLA, over the last eight years, the outgone administration has left the Ghanaian people with an energy sector burdened with the staggering debt of 70 billion Cedis, as of December 2024,” he said.
According to him, several state-owned enterprises in the energy sector are struggling to stay afloat, and until urgent interventions are made, many of them will collapse.
He acknowledged that the financial distress in Ghana’s energy sector remains a significant obstacle to the delivering of consistent and affordable electricity to Ghanaians. He also mentioned that this poses a threat to Ghana’s economy in general.
The president also claims that critical maintenance activities such as the scheduled pigging of the West African Pipeline, WAPCO, were postponed from 2024 to 2025, and there were no sufficient contingency measures for getting fuel supply from alternative sources.
According to him, his administration had had to mobilize resources to secure emergency fuel supplies to ensure that electricity generation continues despite the closure of West African Pipeline. He mentioned that he had been informed that the pigging exercise will be completed in the first week of March. Assuring Ghanaians of constant supply of electricity, he stated, “Once again, additional gas will flow from Nigeria. We are anticipating a mild improvement in the power situation once this project begins.”
He stated emphatically that although the state of Ghana’s energy sector poses great concerns, his administration must remain resolute in its commitment to restoring stability. He pointed that he has directed the Minister for Energy and Green Transmissions, to implement far-reaching reforms to cater for the debt of the sector.
“I have directed the Minister for Energy and Green Transmissions to implement far-reaching reforms, including enforcing a single revenue collection account, strictly adhering to the cash waterfall mechanism, and eliminating all wasteful expenditure by the state utility,” he said.
President Mahama also mentioned that the Minister for Energy has set up an advisory committee to guide the participation of the private sector in metering and billing, in order to improve efficiency in revenue collection, and reduce the high commercial and technical losses that are threatening to drown the state-owned utility companies.
Elaborating on the subject, he explained that a pilot partnership between ECG and ENCLAVE Power, a private-owned electricity company operating in Ghana, has proved highly successful and has provided a workable framework. He stated that their high productivity level, can be used to ensure that Ghana gets revenue compliance and be able to reduce tariffs for the citizens of Ghana.
He concluded by stating, “Mr. Speaker, reduction in commercial and technical losses will lead to affordable tariffs for everyone and will bring relief to all users of electric power. We also aim in the medium term, to achieve 100% gas utilization for power production, and to eliminate completely, the use of crude oil and fossil fuels. This will save Ghana, hundreds of millions of dollars, spent on the importation of fuel oils for power production annually.”
Source: Dehotpress
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