In Ghana, overcapacity in electricity and gas is becoming a thorn in government finance. In fact, each year, the country that produces about twice its peak energy demand pays $ 450 million to independent producers for electricity that is not consumed.
According to Ken Ofori-Atta (photo), the Minister of Finance, the sector’s unsustainable liabilities could rise from $ 2.5 billion in January 2020 to $ 12.5 billion by 2023. “Energy sector financing could become a major risk in terms of the sustainability of the national debt. The country’s debts continue to grow at an accelerated pace despite the government’s efforts to control them, “ adds Hart’s Cobus, chief economist for Central, North and West Africa at the analyst firm Economic NKC African Economics.
The sector’s losses stem from the combination of excess supply, slow customer settlements and low invoice collection rates, compounded by the backlog of institutions and public agencies.
Starting in 2020, the excess supply of gas will worsen the annual deficit by $ 850 million. “Ghana is currently facing overcapacity resulting from an uncoordinated approach that puts the energy sector at risk,” said the Minister of Finance. The manager expects a deficit of $ 1.3 billion in the sector for the fiscal year 2019.
Source: Agence Ecofin