Minister of Energy-designate John Abdulai Jinapor, during his vetting before parliament’s Appointments Committee on Monday, said the country’s energy sector debt has surged past US$3billion – rising from the approximately US$2billion recorded under the previous administration of President John Dramani Mahama.
Mr. Jinapor cited a document titled ‘Summary of Energy Sector Debt and Lenders’ which detailed the debt trajectory.
In August 2017, ESLA PLC conducted a full audit of the energy sector debt, revealing a total liability of US$2.1billion – validated as the debt level when the National Democratic Congress (NDC) government exited office in 2017.
Therefore, the Minister of Energy-designate is refuting claims that the debt stood at US$5billion at the time – explaining that reconciliations during the 2024 transition of power placed the debt stock at US$2.5billion as of September 30, 2024.
Mr. Jinapor said data from the Ministry of Energy, Energy Commission and Electricity Company of Ghana (ECG) confirm the current figure at just over US$3billion.
The Energy Sector Levies Act (ESLA) generated approximately GH₵45billion which has been used to clear part of the debt including interest payments amounting to GH₵9.4billion, he observed.
The ballooning energy sector debt has long been a significant financial challenge, placing immense pressure on state utilities and posing a threat to the country’s economic stability.
Jinapor attributed the rising debt primarily to unpaid bills for electricity that has been supplied and consumed. Consequently, he outlined his vision to prioritise revenue collection and improve operational efficiency in the energy sector.
He called for private-sector participation, particularly in areas such as billing and revenue collection for the ECG – a process he had previously spearheaded. This is essential to strengthen efficiency, enhance collection rates and reduce revenue losses in the energy sector, he added.
Well, private sector participation has long been on the table as a solution to our creeping energy sector debt and to improve efficiency. However, the attempt at privatisation during the previous administration turned out to be a fiasco.
The aborted PDS deal was laced with under-hand dealings – leading to the president aborting the whole enterprises while citing fraud. It is therefore hoped that this time around there will be transparency and the state’s interest held paramount.
