By Amos SAFO
Shortly after winning the 2024 election, President John Mahama made a remarkable statement to the effect that the Akufo-Addo government had “significantly mismanaged the energy sector.” “They kept the lights on by accruing debt, so far, we have audited $2. 5billion in arears”, he alleged.
In my opinion, President Mahama’s statement defies simple logic. The reason is that ex- President Akufo-Addo in 2017 disclosed that he inherited $5.2 billion energy sector debts from John Mahama yet kept the lights on; while the current President (the same John Dramani Mahama) has inherited a debt of $2.5 billion but is not sure whether the lights will be on.
In my humble opinion it is better to borrow less and keep the lights on, than to borrow more, yet plunge the country into darkness as happened between 2012-2016.
President John Mahama’s statement on the $2.5 billion energy debts has been reechoed by government communicators in a manner that suggests that Ghanaians need to brace up for another round of “dum sor.”
In a widely published statement on the looming energy situation, the Member of Parliament (MP) for the Yapei-Kusawgu constituency, John Jinapor warned that the country faces a serious energy crisis, due to lack of fuel to generate electricity. According to him, the Akufo-Addo government failed to make the necessary fuel procurements before leaving office. “I have bad news for you.
As of today, the confirmation we are receiving is that we have only five hours’ worth of fuel left,” John Jinapor stressed. “If you look at the heavy fuel oil and diesel fuel, we don’t have enough to last two days. So, in two days’ time, we are likely to run out of fuel”, he warned.
Red flag
Several days have passed since Mr. Jinapor raised the red flag over fuel shortage and the imminent interruptions in the supply of light. So, has anything changed or Mr. Jinapor was merely causing fear and panic for the sake of political expediency.
Some commentators have suggested that the NDC is only preparing the minds of Ghanaians that the Akufo-Addo administration deliberately created the condition for the current government to fail.
At the time of writing this report, President John Mahama had nominated Mr. John Jinapor for approval as substantive Minister of Energy. Mr. Jinapor previously served as a Deputy Minister of Energy. However, with such an alarmist and negative posture about the sector, I have little hope that Mr. Jinapor can lead the sector to sustainability.
Prior to John Jinapor’s lamentations, other communicators of NDC had complained on social media about the difficult economic situation the Akufo-Addo government bequeathed to the new administration.
Ben Dotse Marlor, a former BBC and United Nations broadcaster lamented over the so-called bad economy NDC inherited from the Akufo-Addo government. According to the renowned broadcaster, “the rot is so deep, the damage is so huge, and the expectations are so high that there is bound to be some huge disappointments.”
Perhaps, the attacks on the economy by NDC communicators are intended to force a certain narrative that the outgone government left little, if anything for the current government to build on. Clearly, they are courting public sympathy to feed the notion that the Akufo-Addo government should be blamed if the Mahama government fails.
Ready for battle
Supporters of the NPP who are gradually recovering from a humiliating electoral defeat have promised fire for fire on social media.. “We will use the same social media to hold John Mahama and the NDC accountable over the next four years. No one can intimidate us”, one NPP blogger warned.
Economy is strong
In his last State of Nation’s Address to Parliament on January 3, 2025, President Akufo-Addo argued that despite the notion by NDC propagandists that the economy is broke, it is rather rebounding, with a more stable fiscal performance.
He explained that economic growth has also returned to the pre-COVID progress, with an impressive growth rate from 4.8% in the first quarter of 2024, to 7.2% in the third quarter. This growth rate has been confirmed by the World Bank and IMF.
The former President emphasized that the current economy growth is reflected in the improvement of private sector credit to 28.87% in October 2024, compared to the (-7.5%) growth recorded in 2023. Economic growth is further evidenced by improved external balances, with the current account balance reaching a surplus of (2.6%) of GDP in the first nine months of 2024, compared to a deficit of (6.6%) of GDP in 2016.
Furthermore, the trade balance recorded a surplus of $3.85 billion, compared with a deficit of $1.8 billion in 2016. “We are handing over the economy with a gross domestic reserve of $8 billion compared with the 6.2 percent John Mahama left in 2017”, Ex-president Akufo-Addo declared.
Against this backdrop many people argue that it is difficult to accept the conclusions of NDC leaders that the economy is in crisis, except for the purpose of preparing the minds of Ghanaians for the worse. Furthermore, many analysts argue that it was under the same economic hardships that the lights were on, free SHS was ongoing and National Health Insurance was sustainable.
Fixing the energy sector
Some energy and finance experts have argued that the current energy challenges had to do with lack of commitment to buy fuel , as Ghana already has the capacity to produce enough energy.
At its peak Ghana needs 3,500 megawatts of power and has the capacity to produce enough power for both domestic and industrial consumption. Sadly, the first government of John Mahama between 2012 and 2016 signed several power purchasing agreements (PPAs) with the combined capacity to 7,000 megawatts, when Ghana needed only 3,500 megawatts. The key component of the agreements was that the taxpayer will was compelled to pay for the excess power whether the country uses the power or not.
The World Bank’s Country Director at the time confirmed that the energy contracts signed by the first government of John Mahama were too expensive. He described the PPAs as the “wrong contracts, at the wrong rates and at the wrong prices.”
Consequently, the PPAs saddled the country with unsustainable debts, and since the Akufo-Addo government assumed office in January 2017, it consistently paid one billion dollars each year in honour of the PPAs. The question is which politicians benefitted and are still benefitting from the power purchasing agreements?
Perhaps, it is good that Mr. Mahama is back in power to help pay some of the PPA debts he accumulated before exiting in 2017. In essence, when the John Mahama’s first government left an energy sector debt of $5.2 billion, the Akufo-Addo government did not switch off the lights; so, it makes no sense for the current government to argue that a $2.5 billion left by the Akufo-Addo government will collapse the energy sector.
