The Ghana Gas Senior Staff Association (GGSA) has issued a stern warning, highlighting the precarious financial state of the nation’s energy sector. Specifically, the Association points to the growing debt owed by the Electricity Company of Ghana (ECG) to Ghana Gas, a situation that threatens to plunge the nation back into the notorious era of ‘dumsor’—intermittent power outages.
In a letter addressed to ECG and copied to key stakeholders including the Minister of Energy and the Board Chairman and CEO of Ghana Gas, the Association voiced its concerns. They emphasized that ECG’s failure to settle its financial obligations not only raises questions about fiscal prudence but also poses a significant risk to the operational integrity of Ghana Gas, a linchpin in Ghana’s energy landscape.
This call to action comes on the heels of mounting pressure on ECG, especially following its recent high-profile donation of motorbikes to the Ghana Police Service. The Association lambasted ECG’s non-compliance with International Monetary Fund (IMF) conditions that stress timely payments to state-owned enterprises within the energy sector. Such deviations, the Association contends, not only undermine Ghana’s economic credibility but also erode investor confidence in the Energy Sector.
“The failure to adhere to IMF conditionality jeopardizes Ghana’s economic credibility and stability, potentially affecting investor confidence in the Energy Sector. Compounding the issue are directives from the highest echelons of Ghana’s leadership the President and Vice President emphasizing the importance of timely payments to state-owned enterprises.
“Despite these directives, ECG’s non-compliance persists, leading to a situation where critical entities like Ghana Gas are left in financial limbo, struggling to fulfill their obligations and maintain operational efficiency,” the Ghana Gas Senior Staff explained.
Highlighting the gravity of the situation, the Ghana Gas Senior Staff pointed to the detrimental effects on the company’s operations, casting shadows on its ability to meet essential financial commitments to key stakeholders like Tullow Oil, a crucial provider of raw gas.
“The financial strain on Ghana Gas not only affects its day-to-day operations but also jeopardizes its ability to meet critical financial commitments, including payments to suppliers such as Tullow, a major provider of raw gas. This situation places Ghana Gas in a Catch, where the very entity it serves fails to reciprocate the necessary financial support.
“The energy sector, a vital component of Ghana’s economic growth, is now at risk of disruption. The inability to settle financial obligations not only hampers Ghana Gas’s ability to maintain infrastructure and operations but also reverberates through the entire energy supply chain, affecting stakeholders and service providers alike,” they wrote.
In a bid to stave off a potential energy crisis, the Association is urging immediate action. They are vehemently calling for the reinstatement of the Cash Water Fall Mechanism, a payment system designed to ensure liquidity across the energy value chain. Without swift intervention, they caution that Ghana faces the very real threat of a return to ‘dumsor’, a scenario that would have dire consequences for the nation’s economy and its citizens.
“We call for prudent actions to reinstate the Cash Water Fall Mechanism and payment of all outstanding invoices due Ghana Gas to give reliable gas supply to prevent power crisis (dumsor) on innocent Ghanaians and the country at Large,” they asserted.
As tensions escalate, all eyes are now on Ghana’s leadership and energy regulators to address the burgeoning crisis, ensuring the sustainability and stability of the country’s vital energy sector.