Mahama blames previous gov’t for 'toxic environment' in oil sector, vows to restore investor confidence

President John Mahama has expressed concerns about the oil and gas sector in Ghana. He described it as a “toxic environment” inherited from the previous administration. This situation led to significant disinvestment and a decline in production.

Speaking at the Africa CEO Forum Annual Summit in Côte d’Ivoire, he highlighted mismanagement of key relationships. This mismanagement caused an average annual drop of 7 percent in production.

Mahama stated, "The environment got a bit toxic." He noted that the government did not prioritize the sector. There were many disputes with oil investors, such as Talos over taxes. Talos went to arbitration and won before Mahama took office.

He mentioned another dispute involving Eni and a local company. The former government reportedly sided with the local firm, leading to legal issues. "ENI was held in contempt," he explained, causing them to move management to Côte d’Ivoire for years. This contributed to an annual production decline of about 7 percent.

However, Mahama said the situation is now stabilizing. Investor confidence is returning, and new activities are emerging in the sector. "Eni are back and drilling again," he noted, indicating potential discoveries of substantial oil and gas quantities.

On financial challenges in the energy sector, Mahama revealed his administration inherited nearly $2.5 billion in debt. This debt is owed to Independent Power Producers (IPPs) and gas suppliers.

"When we returned to office, we found a messy energy sector," he said. The previous government started addressing this issue, but they are continuing it now. They are working on renegotiating and restructuring the debt.

He emphasized addressing inefficiencies across the entire energy value chain: "In cleaning the slate, we must also consider the entire value chain."

Regarding economic outlooks, Mahama stated his government aims for macroeconomic stability and improved business confidence. He mentioned reaching a staff-level agreement during their last IMF review due to recent adjustments.

"People believe we’re on the right path," he added confidently. When asked about public expectations and economic pressures, he replied that stabilizing macroeconomics is crucial.

"It doesn’t keep me up at night — not yet," he said about economic challenges. He believes maintaining focus will help stay on course.

Mahama noted that public patience remains strong: "Fortunately, we’re still in what I call the honeymoon period." He hopes progress can be made before this patience runs thin.

He concluded positively: "So far, so good." He expressed that he sleeps well at night because they are doing things right for now.