NPP's criminal mismanagement of exchange rate contributed to energy sector debt – Kwakye Ofosu

Minister Felix Kwakye Ofosu discussed Ghana's energy sector debt. He blames this debt on policy decisions and "criminal mismanagement" of the exchange rate by the previous government.

On JoyNews’s Newsfile, he mentioned a GH¢67 billion energy debt inherited by the current administration. He emphasized that this government has only been in power for six months.

Kwakye Ofosu explained that most of the debt comes from operational shortfalls at the Electricity Company of Ghana (ECG). The tariff system does not fully cover power production and distribution costs.

He stated, “Even if ECG collected all due payments, it wouldn’t match expenses.” This under-recovery has contributed to the GH¢67 billion debt over decades.

The Minister criticized the former government's choice to exclude fuel costs from electricity tariffs. This decision shifted financial burdens to the state without proper compensation.

“For years, fuel costs were not included in tariffs,” he said. The previous president and cabinet decided consumers should not pay these costs. Unfortunately, they did not cover them either, leading to unpaid debts.

Kwakye Ofosu also blamed former Vice-President Dr. Mahamudu Bawumia for poor exchange rate management. He noted that between July and November 2022, the exchange rate rose dramatically from 6 cedis to 17 cedis per dollar.

This increase caused significant debts because Independent Power Producers are paid in dollars. Additionally, many inputs for power generation are also purchased in dollars.