Ghana Energy Sector Lost $9b Within Two Years — African Centre For Energy Policy

By Maxwell Nkansah

The African Centre for Energy Policy (ACEP) says there is no need for the Government to establish new State-owned Enterprises (SOEs) in the energy and mining sectors in the wake of continuous losses incurred by existing energy sector SOEs.

ACEP said its perusal of the 2020 State Ownership Report indicated that energy sector SOEs posted a cumulative loss of GH¢9.1 billion between 2018 and 2020. On the back of this, the energy policy thinks tank at a press conference in Accra, Thursday, April 28, expressed concerns over the government’s establishment of three new investment vehicles in the mining sector.

It said the establishment of the Ghana Integrated Aluminium Development Corporation (GIADEC), the Ghana Integrated Steel Development Corporation (GISDEC), and the Mineral Income Investment Fund (MIIF) may not achieve their intended purpose as had been the case with other SOEs.

Briefing the media on emerging issues in the energy sector, Mr. Benjamin Boakye, Executive Director, ACEP, said the energy sector “maintains the top spot on the hierarchy of waste generation sectors.”

“The recent State Ownership reports show that the trend in the failures of many state-owned enterprises has not changed. There is no policy clarity on how these new agencies would differ to attract the needed investment in mining.

“Already, the performance of these entities is exposing the quality of assumptions made for their establishment,” he said. Mr. Boakye said there was an urgent need to restructure the energy sector institutions to enhance their performance.

He said agencies that could be efficiently managed by the private sector and regulated by the state “do not need to exist, as government agencies are susceptible to political interference and the generation of unwarranted losses.”

Mr. Boakye said there was also the need to examine all energy sector SOEs with clear and trackable Key Performance Indicators (KPIs) to warrant continuous public investments.

“If we take GH¢1.3 billion from the budget and give it to MIIF to go and manage they’ll generate more return – a hope that history tells us never exist.

“We are only risking the opportunity to save lives by building roads but throwing monies at political entities, which may not result in the ultimate benefit for the Ghanaian people,” he said.

 

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