Minority Fights World Bank Over Energy Sector Claim

John Jinapor

Ranking Member, Mines and Energy Committee in Parliament, John Jinapor has denied claims by the Country Director of World Bank, Pierre Frank Laporte that losses in Ghana’s energy sector is compounding Covid-induced challenges

The World Bank Country Director had highlighted the challenges that have forced Ghana into a situation where the country is now seeking support from the International Monetary Fund (IMF).

He referred to the impact of the Covod-19 which he said has resulted in the difficult environment for businesses, as well as spillovers from other sectors of the economy, especially the energy sector.

Speaking in an interview with TV3, Mr Laporte indicated that losses in the energy sector are compounding the challenges.
“The big issue has been on the fiscal side. Before the current crisis happened, we observed certain challenges on the budget side that really has been the area more hit by everything. Also where actions are required now to deal with them.

“For instance, on the revenue side we have always been challenging saying this is an area where Ghana should do better. We are encouraged by the fact that this should be one of the areas for potential programme and support from the World Bank. The problem is fiscal, not just revenue.

“The problem is that there are also spillovers from other sectors. For instance, the energy sector. There is about one billion dollars going to the energy sector because of losses. The sector itself is not financial viable and to keep it going you have to subsidize.

“Actions are required. Of course with Covid, the general business environment is been a bit more difficult.”

Following the report, John Jinapor, under the pretext of Minority in Parliament believes the country director was misrepresented.

In a statement he said “This deliberate misrepresentation and spin on an otherwise cautious statement from the World Bank can only be the handiwork of an NPP tabloid at the behest of a misguided, confused and clueless government that has lost its way in finding solutions to the current hardship the ordinary Ghanaian is facing.

“On the contrary, the caution from the World Bank only goes to confirm our longstanding warning on the unnecessary political interference, corruption and mismanagement of the Akuffo-Addo/Bawumiah led government in the energy sector since assuming office.”

Though he failed to addressed how and when the excess capacity or pay or take agreement came about which is a major contributing factor causing lot of spillover in the sector, a concern the World Bank raised but he was quick to speak on supposed discrepancies in the amount the current government is paying for power not in used.

He said “Not long ago the Vice-President, Mr Bawumia at an official programme stated that his government has paid a whopping GHS17 billion in so-called excess capacity payments, today we are being told the figure has metamorphosed into GHS12 billion.

“It will be recalled that the Minister for Finance, Mr Ken Ofori-Atta appearing before Parliament to answer questions made claims that government has paid a total of $937.50 million to Independent Power Producers (IPPs) as excess capacity charges between 2017
and 2020, and this figures was inclusive of power and Gas supplied as well as payment for the mandatory 20% reserve margin.

“These contradictory and inconsistent figures can only come from a very confused and dishonest government.”

He mentioned that the previous NDC administration left a vibrant, well resourced and functioning energy sector to the NPP without power crisis.

“We also handed over the energy sector levies to the NPP Government which has accrued over GHS24 billion in revenues. The critical question to the NPP Government is what has happened to the promise of scraping ESLA, a levy that has since been increased by over 30% under this administration.

“We also wish to place on record that the OCTP Gas field has been supplying over 210MMscf of gas im recent times which is far above the contractual volume of 170MMscf. Therefore, the narrative that the Government is paying for unutilised gas from the field is therefore false and cannot be substantiated.

“In the Power sector, the Aggregate Technical, Commercial and Collection (ATCC) losses have risen from 21% under Mahama to over 30% under the Akufo-Addo/Bawumia government. Payment for these huge losses by Government does not, and cannot amount to excess capacity payments.”

According to him, Ghana is in economic mess because of mismanagement, corruption and political interference in the energy sector.

By Vincent Kubi