Government’s Inefficiency Drags On Economic Transformation – Minority

The Minority in Parliament has stated that the government’s inefficiency, indecision and pursuance of inappropriate policies in the energy sector have become a drag on the economic transformation of the country. Addressing a press conference in Accra yesterday, the Minority Spokesperson on Mines and Energy, Mr K.T. Hammond, wondered whether the current situation in the power and petroleum sectors could rise to the challenge of economic growth in the country, conscious of the fact that energy was the pivot and fulcrum on which the economy revolved. The NDC government has promised to promote energy efficiency and conservation technologies but in a classic case where the promise of this government is completely at variance with its practical actions, the government slapped a tax on the importation of energy bulbs, he said. Mr Hammond added that in an effort to promote energy efficiency and conservation, the Kufuor administration embarked on a mass energy conservation initiative in 2007, involving the distribution of about six million energy- saving lamps to Ghanaians. That, according to him, tremendously reduced peak demand for electricity by about 124 megawatts of installed capacity, the equivalent of about $100 million. He said the NDC boasted when the NPP was in power that when given the mandate, they could ensure the delivery of energy services to all consumers in a secure, efficient, reliable, sustainable, safe and environmentally-friendly manner. “Well, if wishes were horses, beggars would ride. Ghanaians have seen how efficient and reliable power has been supplied under the NDC administration,” he said. Mr Hammond said the current energy crisis was internally generated as a result of bad policies and indecision by the government, explaining that it was a multiplicity of factors which were within the control of the Volta River Authority (VRA) and the government. According to him, VRA should have kept up its capacity expansion programme, while the government should have kept its part of the bargain and provided the company with adequate resources to ensure a reliable supply of fuel for the generation of power. Mr Hammond said besides removing its support, the NDC government was indebted to VRA to the tune of about $400 million, thereby financially muzzling and incapacitating the company from effectively discharging its functions. Fuel Price Mr Hammond said the recent price increase in petroleum products had exposed the hypocrisy of the NDC. “From pledging to drastically reduce the prices of petroleum products, we now continue to see a dramatic rise in the prices of petroleum products, as well as a demand by utility companies for a rise in tariffs.” He said these were the results of the depreciation of the cedi, which is also the results of the incompetence of the government in handling the economy. Mr Hammond added that in this year’s budget, the government set aside GH¢800 million as subsidy for petroleum products and called on the government to indicate how it would reallocate that budget now that the subsidy had been removed and consumers were paying full ex-pump price of petroleum products. Hydro Power Mr Hammond said the NPP had, apart from the Bui Dam, embarked on power projects at Pwalugu, Juale, Hemang, Awisam and Tanoso, which had 367 megawatts of generation capacity. He said in the case of the Pwalugu and Juale hydro projects, the Brazilian government, in 2008, offered a $500 million credit facility while the Ghana government was to provide a $55 million marching fund. Mr Hammond expressed worry that all these projects had been abandoned and wondered what had become of the Brazilian credit facility. Gas Supply Mr Hammond stated that as a result of the discovery of oil in commercial quantities, several trillions square feet of gas had also been discovered in the Jubilee TEN and Sankofa oil and gas fields. “But just like many other aspects of the NDC administration, the production of gas to fuel our power generation plants has been beset by inertia, indecision and muddled thinking. Three years into the production of oil in Ghana, associated gas is still being flared while the country relies on the West a Africa Gas Pipelines for only a meagre supply of gas”. Ghana Gas Company The Minority said in a belated effort to develop the country’s gas potential, the government had set up the Ghana Gas Company to put in place infrastructure for power generation. Mr Hammond explained that the establishment of the company, however, was of doubtful legality, adding that the company appeared to be a private limited liability company even though it was thought to be owned publicly by the government “We ask at this stage, who are the directors of this private limited liability company? Additionally, the objectives of the corporation appear to be at odds with the law.” Oil Revenue Mr Hammond said Ghanaians had hoped that the discovery of oil was going to be a blessing rather than the curse that has blighted the economies and the lives of many oil producing countries in the sub-region. He added that the country is estimated to have earned $1 billion since it started production. As at now, almost half of that amount has gone into activities of the GNPC, while a staggering GH₵112 million has also gone into capacity building, Mr Hammond stated, adding that “we have not been told whose capacity was built or where that money went”.