NPP will fix dumsor – Boakye Agyarko

• Posted on July 13, 2016
• by Nana Kwesi Coomson
• Comment

The New Patriotic Party (NPP) plans to establish a statutory body responsible for liquidity management system in the energy sector to ensure that the sector is self-sustaining and self-financing to avoid the current frightening debts collapsing the sector.

The statutory body would be given the necessary powers and functions to discharge its duties effectively.

Just as the Central Bank is responsible for liquidity in the banking sector, so shall the liquidity management system be responsible for liquidity in the energy.

Chairperson of the NPP’s Campaign Sector Committee for Energy, Mr Boakye Agyarko told The Finder that such a statutory body would resolve all the liquidity challenges in the energy sector which has plunged the nation into darkness.

He explained that the statutory body responsible for liquidity management system, which is one of the numerous reforms line-up to fix the power sector, would collect all electricity bills and pay all stakeholders their share through a cascading waterfall system.

According to him, the same body would also be responsible for disconnection of defaulting consumers, and this would ensure that all government institutions pay their electricity bills.

ECG’s debt hits GH¢3.7 billion

The ranking member of the Finance Committee of Parliament, Dr Anthony Akoto Osei, recently revealed that indebtedness of the Electricity Company of Ghana (ECG) currently stands at GH¢3.7 billion.

VRA’s debt hits $1.53 billion

The Volta River Authority owes banks and suppliers $1.53bn ($1,539,799,825.79) as of March 2016.

The debt covers the cost of purchasing Light Crude Oil (LCO), lean gas, as well as long- and medium-term facilities and trade liabilities/overdrafts.

The breakdown of the amount is: outstanding light crude oil – $896 million ($896,589,888.13); outstanding gas invoices – $530 million ($530, 998.937.66); short-term facilities – $33.68 million; medium-term facilities – $120 million; and other trade liabilities/overdrafts – $78.531 million.

Mr Agyarko stated that if a statutory body responsible for liquidity management system was in place, the above debts would not have arisen in the first place.

He stated that when the body is set up, the NPP would use the appropriate strategies to ring fence the existing debts, which he described as legacy debts.

He explained that there exists liquidity management system in several countries around the world, including Cote d’Ivoire, which has proven successful.

The chairperson of the NPP’s Campaign Sector Committee for Energy explained that anytime the statutory body responsible for liquidity management system identifies a liquidity challenge, it would either rely on internal resources or source loans from external sources to fix the problem.

Mr Agyarko noted that since the statutory body responsible for liquidity management system has a huge pool of funds from electricity bills and will also have its own credit rating, banks would be comfortable lending to the body.

By Elvis DARKO, Accra