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Energy Sector: Stop “massaging” legacy debts, workout solutions- Expert tells gov’t

Government is being cautioned to find lasting solutions for the ballooning energy sector legacy debt incurred over  the past years, lest face an overwhelming and distressing debt portfolio in the coming years.

An energy analyst, Kwadwo Poku says current and successive government had resorted to servicing these debts without consideration to the causal elements to the problem.

Speaking in an interview on the Jolly Breakfast Show this morning, Mr Poku recounted that most of such debts are incurred by various Ministries, Departments and Agencies of government despite the huge budgetary allocations made to them yearly.

His comments comes on the back of the revelation made by the Energy Minister John Peter Amewu at a press briefing yesterday, that the energy sector legacy debt has plummeted to US$ 2.7 billion even after servicing about 20 percent of what they inherited from previous government.

Mr Poku couldn’t fathom why government under the new concession agreement for the management of ECG, guaranteed payment of electricity bills incurred by some five ministries and agencies.

“…with the coming of the concessionaire, government is going to take its hands off the whoile situation and then we will now find a way to get the concessionaire to go these institutions to get the money.  Government now gets in to give an assurance…more like a guarantee for five ministries, which they call Sensitive Ministries; Ministry of Interior, Ministry of Defense, Ministry of Education, Ministry of Health, and Office of the President”, he clarified.

Former Energy Minister Boakye Agyarko in January 2018 justified that “after a year in office, the Akufo-Addo-led government has reduced the legacy debt in the energy sector by about 50 percent – having raised US$2.4billion from the 7-year and 10-year cedi-denominated bonds issued last year”

In light of recent development, Mr Kwadwo Poku contends that such debt would accumulate should government fail to rectify the cause of these debts.

“…government has found some money to pay some of the debt but we are back to the same debt that existed two years ago. Meaning that government did not find a solution”, he emphasised.

 

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