Press spotlights how energy sector debt exacerbated Ghana’s debt challenges, others

APA – Accra (Ghana)
The report that the Country Director of the World Bank (WB) in Ghana has highlighted the significant role played by Ghana’s energy sector debt in exacerbating the country’s overall debt challenges is one of the leading stories in the Ghanaian press on Monday.
The Graphic reports that the Country Director of the World Bank (WB) in Ghana, Mr. Pierre Frank Laporte, has highlighted the significant role played by Ghana’s energy sector debt in exacerbating the country’s overall debt challenges.
In an interview monitored by the Ghana News Agency (GNA), Mr. Laporte outlined the factors identified by the WB that are driving Ghana’s debt situation.
Mr. Laporte emphasized that deficiencies within the energy sector, including issues related to tariff systems, management, costly power purchases, and transmission losses, were major problems contributing to Ghana’s mounting debts.
He pointed out that the mismatch between the production cost of Independent Power Producers (IPPs) and the amount consumers paid for electricity led to a surge in debts, as the government was unable to meet its financial obligations to the IPPs.
Moreover, Mr. Laporte criticized the Power Purchasing Agreements (PPAs) signed by the government, stating that they were expensive and burdened the country with paying for unused energy due to “take or pay contracts.”
He noted that Ghana had entered into agreements at unfavorable rates and prices in recent years, which had further impacted the debt situation.
To address this issue, Mr. Laporte urged the government to pursue reforms in tariff adjustments, tackle transmission losses through improved infrastructure, and restructure power purchasing agreements to align with the country’s energy demands.
According to Fitch Ratings, the energy sector represents the largest driver of Ghana’s national debt, with the country owing independent power producers a staggering $1.58 billion.
Fitch Ratings also revealed that while Ghana initially approached the IPPs to restructure their debts as part of the External and Domestic Debt Restructuring, the companies objected to the proposal.
The newspaper says that the National Petroleum Authority (NPA) between January and April 2023 confiscated a total of 73,000 litres of crude oil and 108,000 litres of diesel from smugglers on the high seas in the Western Region.
The separate operations were led by the Ghana Navy and Marine Police between January and April this year.
The Western Regional Manager of NPA, Sandra Aidoo made this known at a media engagement in Takoradi on Thursday (June 1, 2023).
“We initially confiscated 108,000 litres of diesel on the high seas in January. The smugglers were arrested and are currently standing trial. The other was in April when 73,000 litres of crude oil was confiscated, “she said.
Mrs. Aidoo said the suspected smugglers of the diesel were being prosecuted in court and indicated that the NPA would determine what happens to the product after the final determination of the case.
“We still have the product at our disposal, and we shall determine what happens to it after the final determination of the case in court.
For the crude oil, the smugglers bolted, so we have transported the product to Accra, and the public will know what happens to it,” she added.
Mrs. Aidoo stated that the activities of the smugglers were affecting the quality of fuel distributed at the pumps since some filling station owners purchase the products at cheap prices at the blind side of the NPA.
The media engagement organized by the Communications Department was to highlight NPA’s activities in the petroleum downstream industry and respond to industry-related questions from the media.
The Ghanaian Times reports that Mr Kwaku Agyeman-Manu, the Minister of Health has stated more than 6,700 Ghanaians die every year due to tobacco-related illnesses.
He said out of the number, 4,422 representing 66 per cent of these deaths were individuals under 70 and about 18 per cent of Ghanaian lives were lost from exposure to secondhand smoke.
Mr Agyeman-Manu said this when he was represented by the Chief Director of the Ministry, Alhaji Adams Hafis, at the commemoration of this year’s World No Tobacco Day (WNTD) aimed at raising awareness on the harmful and deadly effects of tobacco use.
The programme, which was on the theme; ‘We need food not Tobacco” was organised under the auspices of the Food and Drugs Authority in collaboration with the Ministry of Health.
It was attended by stakeholders from the health sector, students from selected school in Nima and its environs and traditional rulers among others.
He said the extensive use of insecticides and toxic chemicals during tobacco cultivation contributes to poor health of many farmers and families.
The Minister said Ghana had taken steps in tobacco control which increase the protocol to eliminate illicit trade in tobacco products which came in force in January 2022, inclusion of tobacco specific provision in the Public Health Act 2012, passage of the Tobacco Control Regulations 2016(LI).
“The introduction of graphic health warning, continuous enforcement of tobacco control 2030 project,” he added.
The newspaper says that shareholders of Access Bank (Ghana) Plc have commended the efforts of the Board of Directors, Management and staff for its performance for the 2022 financial year.
The commendation was given at the 15th annual general meeting of the bank held in Accra, where various shareholders were present.
Speaking at the meeting, shareholders noted that the bank’s performance signalled strong signs of sustained growth and resilience, in spite of it being overshadowed by credit impairments relating to Ghana’s sovereign-debt issues.
During the period, Access Bank Ghana recorded over 35 per cent growth in its balance sheet size from GH¢7.455 billion to GH¢ 10.835 billion.
Operating revenue went up by 38 per cent, from GH¢ 832 million to GH¢ 1.150 billion, while loans and advances witnessed a 41 per cent growth, from GH¢ 1.167 billion to GH¢ 1.645 billion, and total deposit by 60 per cent, from GH¢ 4.623 billion to GH¢ 7.399 billion.
In her maiden address to members at the meeting, the newly appointed Board Chairperson of Access Bank (Ghana) Plc, Ms Ama S. Bawuah, revealed that although macro-economic challenges affected the bank’s profit, it finished the year on a sound footing and with a momentum to change the narrative for 2023 and beyond, having, among other things, maintained a healthy capital adequacy ratio of 34 per cent, which is far above the 10 per cent regulatory threshold.
“The year 2022 was an exceptional year due to the largely unforeseen external shocks that resulted in painful outcomes and decisions not just for our bank, but several players in the financial services industry. We are, however, optimistic about our future successes given the strong fundamentals we have built overtime, together with our unrelenting commitment to global best practice in applying sound corporate governance and risk management practices,” she added.
Access Bank’s audited financial statements for 2022 revealed that the bank’s profit had been eroded leading to a loss position of GH¢ 440.6million.
“In compliance with the Bank of Ghana’s directive to suspend the declaration and payment of dividends and other distributions to shareholders, our bank will, therefore, not be in a position to recommend any dividend pay-out,” Ms Bawuah said.
GIK/APA