Ghana’s main opposition party is raising the red flag over rising debts of the country’s state-owned refinery and power generating companies, warning that this has serious repercussions for the economy.
The National Democratic Congress (NDC) says the Tema Oil Refinery (TOR) and the Volta River Authority (VRA) have been piling up debts that are “lurking danger in the government’s so-called micro-economic stability”.
John Dramani Mahama, vice presidential candidate of the NDC, warned that if immediate steps were not taken, the indebtedness of the two companies would have serious repercussions, including the possible collapse of some banks.
He told a seminar on energy for presidential candidates organized by the Energy Centre of the Kwame Nkrumah University of Science and Technology (KNUST) in Kumasi on Friday that TOR was currently indebted to the Ghana Commercial Bank alone in excess of US$500 million.
VRA, Mahama said, was indebted to its suppliers and banks in excess of 750 million dollars and even had problems paying staff.
A total debt of US$1.25 billion of the two companies was unacceptable, he said, especially as Ghanaians continued to pay more for electricity and petroleum products.
Mahama said when the NDC won power it would increase private sector investment and participation in the generation and distribution of power to increase energy generating capacities and access.
He said much as the rising prices of crude oil was a factor in the current high cost in petroleum products, there were added costs to the consumer, arising from the inefficiency and lack of transparency in many aspects of the operations of entities in the sector as well as outright corruption.
Mahama said fundamental to Ghana deriving maximum value from the oil and gas resources that have been discovered was to ensure a framework for management of the sector that was transparent and free from corruption. Panapress .