Ghana-US sign $498m compact as ECG management set to be outsourced

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Created on Wednesday, 06 August 2014 00:00

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Ghana-US sign $498m compact as ECG management set to be outsourced

Ghana and the United States have signed an agreement for the release of the $498,200,000 grant meant to improve power distribution in the country under the second compact of the Millennium Challenge Account.

President John Mahama and US Secretary of State, John Kerry looked on as Ghana's Finance Minister Seth Tekper and CEO of the Millennium Challenge Corporation Dana Hyde signed the agreement last Tuesday in Washington D.C.

Confirming the signing to Joy News, Director of communications at the presidency Ben Dotse Malor explained the MCA "is going to make a huge difference in the lives of people, in the lives of companies and in the work of many industries....it will be devoted to the largest degree to power energy production. This will greatly result in the reduction of poverty across Ghana".

Ghanaians have had to endure a two-year erratic supply of power that has brought businesses to its knees. The Ghana Revenue Authority has explained its inability to achieve its tax collection targets was because businesses have suffered due to the energy crisis.

The President has assured, he will end Ghana's energy crisis and asked Ghanaians to give him sometime.

“This new Compact with the MCC demonstrates the growing cooperation between Ghana and the USA. It will benefit millions of our people and contribute immensely to the achievement of my 'Energy For All' objective,"‎ said President John Dramani Mahama.

Under the second compact which will last for five years, Ghana has agreed to give up the management of the Electricity Company of Ghana for a private company in the hope of bringing efficiency in ECG's operations.

The outsourcing of management of the company allays fears the government-owned power company was up for outright sale.

Ghana is also expected to contribute 15 per cent of its own funds to the project pushing the figure to $535,565,000.

The second compact according to the MCC, is the largest U.S. Government transaction to date under Power Africa and will serve as an anchor for increased American engagement in Ghana.

“MCC’s Ghana Power Compact takes a system-wide approach to transforming Ghana’s energy sector. The compact invests in projects focused on distribution to make the country’s power utility financially viable and capable of attracting private investment while it also funds initiatives supporting greater energy-efficiency and cleaner renewable energy. These investments will provide Ghanaian homes, schools and hospitals with the access to the reliable electricity they need to thrive,” said Dana J. Hyde, MCC’s chief executive officer.

MCC will make an initial investment of up to $308.2 million, including funding to put the Electricity Company of Ghana, the country’s main distribution company, on a sustainable path, help the utility meet current electricity needs and upgrade infrastructure to reduce outages and improve service. A second tranche of up to $190 million in funds will be made available if Ghana accomplishes a set of reform targets set forth in the compact.

The Millennium Challenge Corporation (MCC) , a bilateral United States foreign aid agency signed the first compact with Ghana in August 2006 and gave the country US$547 million. It brought significant infrastructural projects including the now iconic National Highway (N1) in Accra.

MCC signs either a compact or a threshold agreement with a partner country. A compact is awarded if the country scores highly on the selection criteria indicators. If the country scores poorly but has a positive, upward trend on the selection criteria, it can still be eligible for a smaller grant, called a threshold program.

Source: Myjoyonline.com|Edwin.appiah

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BoG spends $6.5 billion in 6 years on failed attempt to stabilise cedi - Bawumia

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Created on Sunday, 03 August 2014 00:00

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BoG spends $6.5 billion in 6 years on failed attempt to stabilise cedi - Bawumia

Dr. Mahamudu Bawumia has claimed that the Bank of Ghana, under the National Democratic Congress government, has spent a whopping $6.5 billion from 2009 to date, in their failed attempt to stabilize the value of the Ghana cedi.

Notwithstanding this large expenditure of scarce foreign exchange reserves, the two time running mate for the opposition New Patriotic Party (NPP) says Ghana's currency is now officially, the worst performing currency in the world.

According to Dr. Bawumia, in 8-years of the administration of President John Agyekum Kufuor, the Bank of Ghana spent some $2.5 billion in non-oil foreign exchange sales to stabilize the cedi. At the time the NPP left office in January 7, 2009, the cedi traded at GH¢1.2 to $1.

However, despite the $6.5 billion spent by the Bank of Ghana to intervene on the foreign exchange market, the Ghana cedi, according to Dr. Bawumia is currently trading at almost GH¢4 to $1.

He was addressing delegates from the Upper West Region during the tour of the region, Friday evening, by Nana Addo Dankwa Akufo-Addo.

Dr. Bawumia noted that this indicates that the fundamentals underlying the Ghanaian economy are seriously out of gear. He also pointed out the fact that by the end of 2014 the cedi would have depreciated by more in one year than in the entire period of the NPP administration between 2001-2008.

The former Deputy Governor of the Bank of Ghana also revealed that Ghana's net international foreign exchange reserves, which currently stands at some $700 million, can now only account for less than one week of import cover, a very precarious situation.

"The bills that we owe as a nation is currently more than what we have in our reserves, and yet still the government says we are not in a crisis?" Dr Bawumia asked.

In view of this serious situation, Dr. Bawumia stressed that Ghana will soon have no option than to opt for a bailout from the International Monetary Fund, as opposed to claims being made by government that it is not considering a loan from the IMF.

Dr. Bawumia indicated that the admission made by Finance Minister, Mr. Seth Terkper, on July 17 that "paying statutory funds will cripple the economy" means the economy is already crippled and on the verge of bankruptcy.

"When schemes like GYEEDA, SUBAH, SADA crop up, the NDC will always find money for it. However, when statutory payments to the NHIS, District Assemblies Common Fund, GETFund are to be made, the government will say there is no money," Dr. Bawumia noted.

He continued, "When they say there is no money, they will tell you some dwarves came in and stole money. If it is not high rise buildings, it is speculators. If it is not speculators, they will tell you it is the redenomination of the cedi in 2007 that is the cause of the current crisis. They really do not have a clue”.

Ghanaians and the international community, Dr. Bawumia noted, have lost confidence in the Ghanaian economy, and contrary to recent expressions of confidence in the economy by Government officials, Dr. Bawumia argued that "You cannot manufacture confidence. Confidence has to be based on prudent, sound and credible policies. You cannot just wake up and try to convince people to have confidence in an economy.

Unfortunately there is no basis for this contrived confidence. If you are going to solve a problem, the first thing to do is to admit the problem. The NDC have refused to acknowledge that the economy is in crisis, how can the problem be solved if expectations are not properly aligned?"

On the decision to go for a 3rd Eurobond issue, which is expected to raise $1.5 billion to be used to fund government’s capital expenditure in the 2014 Budget as well us shore up depleted foreign exchange reserves, Dr. Bawumia's prognosis was simple.

"You cannot borrow yourself out of bankruptcy," he said. With Ghana’s debt levels at almost 60% of GDP and interest payments in 2014 amounting to more than four times Ghana’s oil revenue for the year, it is not clear how adding to the debt burden is going to get us out of the current crisis.

While the Eurobond borrowing would provide additional borrowed foreign exchange to support the cedi, the impact is bound to be temporary if the fundamentals are not addressed. Note that the Bank of Ghana has already spent some $6.5 billion of foreign exchange reserves in the last six years to no avail. So what difference will an additional $1.5 make if the underlying policies are wrong?” he asked.

Source: Akufo-Addo Campaign Team

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IMF Bailout Last Option –Osaafo Maafo

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Created on Tuesday, 05 August 2014 00:00

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IMF Bailout Last Option –Osaafo Maafo

Osaafo Maafo has stated that an International Monetary Fund (IMF) bailout, which the government intends to seek, is the only option in the face of a biting financial predicament.

Speaking on Oman FM radio yesterday following the decision to turn to the Bretton Wood institution by a previously reluctant government, he said besides making funds available to a cash-strapped system, it would ensure that those in charge adhere to a regimen of financial discipline, which has been lacking in the past years.

“The IMF would only rescue a cash-strapped country after administering various disciplinary measures such as ensuring that the payroll is bereft of ghost workers and avoiding unfeasible projects,” he said.

“I am not against government turning to the IMF in as much as it would restore some level of fiscal discipline in government, the lack of which has sent us to the state in which we are today. When you are receiving an IMF treatment, you can’t spend recklessly as you have always done,” he said.

The money being used to salvage our ailing economy is sourced from other people’s taxes and revenue and so it behooves the IMF to ensure that such funds are not expended recklessly.

“I am happy government has taken this decision even though the conditionalities would come with hardships. Let us pray that government would listen to the IMF. The home-grown policy to salvage the ailing economy has not been helpful,” he said.

“If they had listened to us when we counseled them from 2009 the situation we are in now would have been obviated. They decided to insult me when I cautioned them. In economic matters insults do not count. It is not about equalization and politicization which they resorted to,” he said.

On the way forward, he said “let us accept that we are in crisis. If we do so then we would attract the sympathy of others who can come to our aid. Let us examine the bonded warehouse issue, our revenue, ensure that our procurement law works and avoid the inflation of figures. What we cannot afford let us not pretend we can. We should minimize on loans which are unhelpful to our cause.

“When the import bill is huge and there is low inflow, the value of the currency would depreciate,” he added.

Mr. Osaafo Maafo was a Finance Minister under the previous Kufuor administration.

His tenure saw a massive improvement in the country’s fiscal management. From 1996 to 2008, the Civil Engineer was MP for the Oda constituency.

His remarks come on the heels of the government’s eventual decision to bit the bullet and turn to the IMF to rescue it from the current fiscal crisis.

BY A.R. Gomda

Source: Daily Guide

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SPEECH DELIVERED BY NANA ADDO DANKWA AKUFO-ADDO AT THE LAUNCH OF HIS 2014 PRESIDENTIAL PRIMARY CAMPAIGN AT AKWEI'S HOUSE, AKOTO LANTE, ON 29TH JULY 2014 AT 11:00AM

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Category: Politics

Created on Wednesday, 23 July 2014 00:00

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Ghana Will Work Again - Says Nana Addo

Good morning and welcome.

I'm honoured that you have all come to join me begin my campaign to lead our great party into the 2016 general elections at this famous venue - Akwei's house. This house evokes a lot of emotion and fond memories in me. Born as I was, in Swalaba, not so far from here, I know the significant role Akwei's House has played in the history of our nation.

Many of the great figures of the United Party, from which today's NPP descends, used to meet here regularly in the late 1950s. Persons like Emmanuel Obetebi-Lamptey, Ashie Nikoi, Attoh Okine, K.Y. Attoh, Henry Thompson and the young Attoh Quarshie -- all of whom were victims, indeed among the first, of the infamous Preventive Detention Act -- were frequent visitors, coming here to interact with their supporters, and charting their determination to resist the incipient dictatorship of Kwame Nkrumah's CPP.

They were determined to hold aloft the banner of liberty, and were prepared to pay the price for so doing. Even though initially it appeared they had failed, history has subsequently vindicated them. They were the pioneers in the construction of the multi-party democratic Ghana that we are enjoying today. We have to emulate their determination as we begin the difficult task of returning the NPP back into power, and restoring Ghana onto the path of progress and prosperity once again.

In our quest to wrestle power from the incompetent hands of John Mahama, our party, over the last 7 months, has held elections from polling station, constituency, regional, right up to the national level, and in the process elected some 140,000 executives and officers to steer the affairs of the party for the next four years. The generally peaceful, free, fair and united manner in which the polls were conducted serve as an encouraging testimony to the NPP's democratic culture and a neat exhibition of the spirit of oneness that the NPP needs. This must and will continue. We are now at the final hurdle in these internal contests, and we must consciously let peace and unity within the NPP serve as our constant guide.

On my part, I continue to be humbled by the confidence that many, many Ghanaians from all walks of life, especially young people, some of whom are yet to cast their first ballot, have in me. I am profoundly grateful that so many people consider me worthy to lead this promising nation of ours, even at the young age of 70. I do not know what 70-year olds are supposed to feel like but I feel well, my body is in good shape; my mind remains as sharp as it ever was. I am constantly grateful to the Almighty that I have been so blessed. I have questioned and examined myself intensely to be sure that, to borrow a phrase, the competitive fire still burns in my belly. Ladies and gentlemen I am fit and ready and my appetite is as keen as ever to go into battle for the cause of the NPP.

I wish to assure all of you gathered here, that, contrary to the propaganda out there, Nana Akufo-Addo is emotionally, intellectually, psychologically, physically, patriotically and spiritually strong enough to lead this party and our dear nation Ghana.

In the 8 years of NPP administration under the outstanding leadership of President J A Kufuor, through our policies in education, health, youth employment, small loan schemes, to name a few, we demonstrated in practical terms our belief that government has a responsibility to provide all its citizens with skills and opportunities to create their own wealth. As a party, we have always sought to create a political economy consistent with our fundamental belief in individual liberties; provide equal opportunities to all citizens; promote and empower the private sector, so as to create wealth, and use the tax revenue accrued to the state from such free entrepreneurship to develop infrastructure and invest in the social sectors to create greater opportunities for the less well off.

It is obvious to us all now that these programmes and ideas can only be implemented under an NPP government. The NPP has unfinished business. Ghanaians are impatient for the NPP to finish its internal contest and focus on what matters most; the restoration of hope and the development of our nation.

From what I hear on the ground, from the endorsements and declarations of support for my candidature, both publicly and privately, I believe in all humility that I am the party's best bet to winning power in 2016. The journey to 2016, the journey to maintain the confidence of the great majority of Ghanaians for the NPP, secure that victory, and begin the all-important project to rescue Ghana and get Ghana working again has started. Ghana is not working. Ghana should work again. And, with me and the NPP, with you the people and with God on our side, Ghana will work again!

I urge all my fellow aspirants and supporters to be mindful of the fact that the people of Ghana are looking up to us so to conduct our affairs as to give them the confidence to trust us with the mandate to serve them once again. Ghanaians are looking to the NPP to restore hope and offer the kind of purposeful leadership that will speed up the development of our nation and the prosperity of every Ghanaian. On my part, I have always mounted a clean campaign and have always focused on issues. Nothing shall sway me from this path, because this is but a contest between members of one family, the Great Elephant family.

We have to focus on the havoc Mahama's government is wreaking on the populace on a daily basis. We are two years in the second term of the NDC. The Better Ghana they promised in 2008 and repeated in 2012 remains an empty and cynical slogan as is their “e dey bii keke”. There can be no Better Ghana when access to healthcare is worse today than it was even a year ago. There can be no better Ghana, when our cedi is the worst performing currency in Africa and the second worst in the world, better only than Ukraine's local currency.

There can be no better Ghana when higher taxes, high utility prices, high fuel prices, low sales are killing businesses up and down the country. There can be no better Ghana when our young people cannot find jobs. There can be no better Ghana when the leadership of the country has lost touch with the concerns of the people and dances to the tune of “Yen tie obiaa”. There can be no better Ghana so long as the NDC remains in power. There can be no better Ghana with the current clueless and uncaring leadership.

The crisis facing our country can be cured. But it can only be cured by a competent and dynamic team with a programme for determined implementation under the decisive leadership of a person with a clear vision of Ghana's future. At the heart of the crisis Ghana is facing is a crisis of confidence in leadership. The people have lost confidence in President Mahama and the NDC’s ability to govern.

This is clearly evident in the unprecedented nationwide demonstrations that have rocked this country, recently by the Trades Union Congress, the Industrial and Commercial Workers Union, health workers, workers in our educational institutions, railway workers, residents in some communities in Accra and other parts of the country protesting against the harsh conditions of life, including the poor condition of roads in their areas. It is this same loss of confidence in the leadership that led to the disgraceful spectacle of Ghana flying money halfway across the world to pay a mutinous national team.

It gives me no pleasure to say that things are unfolding just as we had predicted, and that, indeed, the chickens have come home to roost. The hole this country is in is a result of the desperation of the NDC government to win the 2012 elections at all cost. The reckless overspending which resulted in a budget deficit of GH¢8.7 billion representing 12.1% of GDP, the widespread corruption, the payment of millions and millions of Ghana cedis of our money in dubious judgement debts, the disregard of value for money in the award of contracts is what has brought Ghana down on its knees. It gives pain to watch the NDC display such utter incompetence and fail so abjectly to fix the mess it has put us in.

There are some who are expressing loud anxieties that Ghana might be heading back to the dark days because of the chaos, economic meltdown and blatant corruption we are experiencing. Ladies and gentlemen, there is one critical difference today. That is, we have a democracy and an elected government; all our institutions might not be working as well as we would like, but we have a strong national consensus on multi-party democracy being the way to govern. Our regime change comes and will come in December 2016 when we vote out this clueless and uncaring government. That might seem a long way off for many who are currently enduring the difficulties and hardships, but I urge you all to keep hope alive. We turn our back on our democracy at our peril.

In the meantime, we will continue to urge President Mahama to listen to the advice of many well-meaning Ghanaians and make the lives of our people easier. For example, the Minority in Parliament deserves to be heard on the subject of reckless and dubious loans. For the moment we shall keep on praying for our President at the minimum to keep our nation together, and to alleviate the suffering of our people.

My vision and determination to transform Ghana remains as strong as it ever was. There is an even greater urgency now to give Ghana the leadership it deserves, the leadership that can bring back confidence to our country. The soul of our nation is in pain. Our people are in pain. The international community is puzzled; how did Ghana get itself into this mess within such a short period. Investors are worried. Parents are in tears. Children fear for their future. Workers are worried and unhappy.

We will put Ghana back to work. We will stabilize the cedi, we have done it before. We will manage the economy competently, we have done it before. We will create the environment for the private sector to thrive, we have done it before. We will provide the leadership that will mobilise the positive energies of the great majority of Ghanaians, irrespective of their political affiliations, to take the bold steps towards the structural transformation of our national economy, which is the way to lasting prosperity. We will improve significantly the governance of our nation, we have done it before. I am strong in my conviction and confident that we can do it. I know we are capable. God did not put us on this rich land to be poor. It is bad leadership that makes us poor.

God-willing, I will from tomorrow embark on a nationwide tour ahead of the holding of the Special Electoral College, fixed by the party's National Council for 31st August 2014. I will travel to Bolgatanga, Tamale, Wa the next three days, and to all parts of the country to plead with delegates to give me the mandate to lead the NPP once again. 2016 is and must be the time to rescue Ghana.

I have established a campaign structure in the constituencies, in the regions and across the nation to help me run an effective campaign.

The President of the Republic said at the Eid-ul Fitr celebration in Kumasi yesterday that he was the captain of the ship of state. This brings to mind an old Trinidadian calypso song of the 1970s, called Gypsy, whose words are apt for today's Ghana:

"Captain this ship is sinking

Captain these seas are rough, oh yes

We gas tank almost empty

No electricity, we oil pressure reading low

Shall we abandon ship

Or shall we stay on it and perish slow"

I will stay on this ship, the NPP will stay on this ship and we shall get it to refloat. We shall restore hope and we shall make Ghana work again and bring back the smile to the faces of our people. The Black Star will shine again!

To the people of Ghana I say, keep hope alive. I believe in Ghana. And, above all, I believe in God. Change will come in 2016. I am ready. Let the journey begin.

God bless the NPP!

God bless Ghana!

God bless Africa!

Thank you.

Source: Nana Addo-Dankwa Akufo-Addo

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