No way out of energy crisis until $1bn financial crisis is solved
Ghana’s energy crisis is overshadowed by a much bigger financial crisis that will keep the country in persistent darkneess until more than $1bn debt albatross is removed.
Gving a breakdown of the debt, the Executive Director of the Africa Centre for Energy Policy (ACEP), Dr. Mohammed Amin Adam, revealed that government owes the Electricity Company of Ghana $500million while ECG owes the Volta River Authority (VRA) more than ₵1bn.
In turn, VRA owes N-Gas of Nigeria $170million while Sunon Asogli owes VRA more than $100 million.
The labyrinth of debt does not end there. Without giving numbers, Amin Adams revealed VALCO owes VRA while ECG owes Asogli.
The depressing continues as VRA owes Ghana Gas and also owes several banks, he said.
“We are talking about a cummulative debt of about $1billion,” he assesed.
“The power sector faces its biggest financial ciris and that is what nobody is bold enough to tell us,” Dr. Amin Adam said on Joy FM’s Super Morning Show Friday.
His analysis comes as the national grid loses about 590 megawatts explained as resulting from technical challenges at VRA and a fault within pipelines in Nigeria.
Ghana Gas which resolved a technical challenge Wednesday is ready to pump more than 80million standard cubic feet of gas if VRA’s power plants are in good condition to receive. They are not.
The national power generator as of Thursday evening could only take 38 million scf with which it can generate only 155 megawatts.
Govt spending exceeds revenue for seven months
Government ended the first seven months of this year spending slightly more than revenue mobilized.
Latest figures covering fiscal operation from January to August shows that it missed out slightly on the expenditure target.
According to the figures, government ended first seven months of this year, spending almost GHC1 billion more than the GHC23.7 billion projected.
The excess spending were influenced by overruns in capital expenditure.
For instance for the month of August, government spent GHC4.2 billion, as against a target of GHC2.9 billion.
The figures however show that government managed to keep spending within its expenditure limits in most of the areas with the exception of capital expenditure.
Government is hoping to end 2015 with an expenditure target of GHC37 billion, according to its revised budgets.
However with the latest fiscal numbers – which shows that it spent GHC25 billion as at August this year – it is not clear whether government will end this year with another high deficit or not.
On the revenue side there was a lot to smile about, as government ended the month of August getting a little over GHC1 billion more than the GHC19 billion targeted.
Tullow, Ramel, Multi-Pro top 2014 Ghana Club 100 rankings
Oil and gas explorations giant, Tullow Ghana Ltd ranked number one at the fourteenth Ghana Club 100 awards held Thursday.
In second place is Ramel International Group, a giant leap from number 64 on the 2012 list. The multi-services firm provides travel and tours services, conference organization, airline ticketing among others.
Manufacturing firm, Multi-Pro Private Ltd ranks number three.
Chief Executive of Ramel, Amartey Nuno-Amarteifio attributed the leap of his company on the rankings to consistency and teamwork.
“We are going to continue to grow, we are going to continue to expand our franchise across Ghana, West Africa and the world,” said Nuno-Amerteifio.
The Ghana Club 100, spearheaded by the Ghana Investment Promotion Centre (GIPC), is an annual list of top 100 companies in Ghana. The first list was compiled in 1998 to recognise the best companies in the different sectors of Ghana’s economy. The awards also aims at encouraging competition and improve products and services.
This 2013/2014 event, held at the Banquet Hall of the State House, was on the theme “Impact Investments and Sustainable Economic Development”.
Government advised to cut expenditure to address Ghana’s economic challenges
Chief Executive Officer of Dalex Finance Ken Thompson is pushing for some drastic expenditure cuts to help address the current challenges the economy is faced with.
It is believed the current difficulties are, to a large extent, attributable to serious budget overruns on the part of government.
Ghana has been on debt pressure for some time now but government this month issued a 1 billion-dollar Eurobond at an interest rate of 10.75 percent – a situation which would culminate in the payment of 108 million dollars every year as interest.
This follows recent figures from the finance ministry which indicates that Ghana’s public debt as at July 2015 stood at 83 billion Ghana Cedis, representing 62 percent of GDP.
Finance Minister Seth Terkper hinted this week that Ghana’s public debt now hovers around the dreaded 70 percent mark.
In its latest report however, the IMF forecasts that Ghana could end the year with its public debt hitting 72 percent of GDP.
NCA punishes Vodafone for failing quality of service test
Regulator of the telecom industry the National Communications Authority (NCA) has sanctioned telecom operator Vodafone for failing an aspect of the authority’s quality of service test conducted in the Eastern region this year.
The latest development was revealed in a report released by the NCA following the testing of all the telcos in the country except Expresso on various quality matters in the Eastern region in August 2015.
The test was conducted in 9 towns in the Easter region including Akosombo, Kade, Nkawkwaw, Nsawam, Yilo Krobo and Koforidua among others.
The tests bordered on the congestion Rate, Call Drop Rate, Voice Call Audio Quality and Coverage Signal Strength of the various telcos among others.
According to NCA Vodafone failed the call set up time test conducted in the region.
Vodafone was not the only telecom operator which had call setup delays Aitel, and Glo also recorded delays but were not sanctioned by the NCA.
Ghana-Denmark sign maritime cooperation agreement
The Ghana Maritime Authority (GMA) and the Danish Maritime Authority have signed a bilateral agreement for the mutual recognition of seafarer certificates between Ghana and Denmark.
The director generals of the two institutions, Rev. Dr Peter Issaka Azuma and Mr Andreas Nordseth, initialled for their respective organisations.
The ceremony took place in Copenhagen, Denmark, last week when a maritime delegation from Ghana participated in this year’s Danish Maritime Forum from October 6 – 9, 2015. The delegation was led by the Deputy Minister of Transport, Mrs Joyce Bawa Mogtari.
The forum brought together ministers, top executives and experts from all aspects of the global maritime industry to discuss the opportunities and challenges facing the maritime industry and how to unleash its full potential for long-term economic development.
Mrs Bawa Mogtari presented a paper on the topic “Improving Maritime Security in the Gulf of Guinea- the Ghanaian perspective”.
She also participated in ministerial roundtable discussions which included the Minister of Business and Growth of Denmark, Mr Troels Lund Poulsen and the Minister of Oceans and Fisheries, South Korea, Mr Yoo Kijune, as well as the Under Secretary of Transport, on how to improve maritime cooperation between the two countries.
Power crisis to get worse – ECG
The current power crisis is expected to worsen again as utility providers struggle to keep the lights on for domestic and industrial consumers.
This is due to some technical problems with the Volta River Authority (VRA)’s power plants in the Western Region and other power plants across the country.
The Ghana Grid Company (GRIDCo) requested the Electricity Company of Ghana (ECG) to start shedding about 600 megawatts (MW) of power from Thursday.
The directive to the ECG, according to GRIDCo, stemmed from the insufficient generation of power.
The GRIDCo off-peak load-relief request affected 210MW of power to the Greater Accra Region; 120MW to Ashanti; 120MW to Tema; 60MW to Western; 40MW each to Central and Eastern, and 20MW to the Volta Region.
The VRA relies on the Ghana Gas Company to power its thermal plants in Takoradi, and also relies on N-Gas in Nigeria to power thermal plants in Tema.
But the supply of gas has not been consistent due to intermittent technical challenges as well as inadequate funding to secure the product.
Government pays 24.5 percent on new three year bond issued
The Bank of Ghana said it paid a 24.5 percent yield on a 3-year fixed rate bond on Thursday, up from 23.47 percent paid on a similar bond in May.
International investors took up 84.09 percent of the bond and the bank said it accepted 994.9 million cedis ($262.5 million) in bids for the bond out of 1.35 billion cedis ($399 million) tendered.
“The result shows that there is international interest in cedi-denominated debt after the Eurobond but the yield shows investors are wary of the currency risk,” Sampson Akligoh, managing director of InvestCorp investment bank in Accra, told Reuters.
The government launched a $1 billion Eurobond at a 10.75 percent coupon rate on Oct. 7. It had initially targeted a $1.5 billion bond at 9.5 percent and a failure to achieve this has put pressure on the domestic debt market, economists said.
Ghana’s currency has fallen more than 50 percent in two years, one example of the fiscal crisis the West African state is attempting to tackle with the help of an International Monetary Fund aid programme.
Ghana was one of Africa’s strongest economies for years due to revenues from its exports of gold, cocoa and oil. But the government estimates growth at 3.5 percent this year because of lower global commodities crisis and fiscal problems.
Credit: Joy Online, Citi Online, Graphic