Finance Minister, Ken Ofori-Atta has indicated that the government spends $500 million annually to settle energy sector debt created by the previous government.
According to him, it is curious the minority caucus claim that the high energy debt is one of the reasons cited for his reckless management of the economy.
He pointed out that a lot of the energy sector debt burden is a result of needless contracts signed by former President Mahama’s administration with some independent power producers during the power fluctuation or ‘dumsor’ season.
Mr Ofori-Atta said “we laid out the 2022 budget to achieve fiscal consolidation anchored on debt sustainability”, adding, “It is important at this point, to also highlight that a key component of the national debt stock related to three exceptional expenditure items that are neither external nor a creation of this government”.
He disclosed this when he appeared before Parliament’s Ad hoc Committee to defend himself against seven allegations being used by the minority caucus as the bases for seeking his removal from office through a censure motion,
“Energy Sector Excess Capacity payments (17 billion), which relate to a legacy of take or pay contracts that saddled the country’s economy with annual excess capacity charges of close to $1 billion; direct COVID-19 expenditure amounted to 12.0 billion, and the banking sector clean-up ( 25 billion)”.
These three items alone, Mr Ofori-Atta said “contributed to about 23% of our annual debt servicing cost”.
“These three items were not created through the recklessness of the New Patriotic Party”, he noted.
According to him, the “long dumsor that Ghanaians endured under the NDC administration between 2012 and 2016 was more to do with the NDC government’s inability to pay for power”.
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