In a recent address, President John Mahama of Ghana stated that the government is on track to reduce its substantial $2.5 billion debt to independent power producers and gas suppliers by the end of this year. Speaking to an audience in Ivory Coast, Mahama expressed optimism that future collaborations with energy partners would foster a more favorable economic environment.
The issue of energy sector debt has persisted as a significant burden on Ghana's economy, particularly since Mahama assumed his second term as president in January. Last year, in a move aimed at alleviating some of this financial strain, the government successfully brokered an agreement with independent power producers to restructure approximately $1 billion in legacy debt. However, ongoing arrears to service providers have continued to complicate economic recovery efforts.
President Mahama highlighted the inefficiencies of the state-owned Electricity Company of Ghana (ECG), which reportedly suffers losses of around 40% due to ineffective revenue collection. To combat this challenge, he announced plans to integrate private-sector participation in the billing process, an initiative designed to enhance efficiency and profitability. “People are queuing up, I said they should wait. We’re going to do expressions of interest,” Mahama noted when prompted about private investor interest in the project.
The cabinet will deliberate on whether to enlist one or multiple partners for this initiative, with the President emphasizing the importance of involving local entities in the process. This move aims to create a more sustainable and efficient energy sector that can support the nation's economic growth.
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Additionally, Mahama encouraged companies to maximize opportunities in the oil and gas sector before the global shift to renewable energy accelerates. “Oil is in transition, and so everybody who has any assets should be pumping like there’s no tomorrow,” he stated, indicating a willingness to support firms keen on exploring and extracting oil. “I would lay a red carpet to anybody who wants to drill and pump oil to do so,” he affirmed.
As Ghana navigates its energy challenges, the government's commitment to addressing its debt and enhancing efficiency in the power sector could herald a new chapter in the nation's economic landscape.