Pressure is mounting on government to take a second look at an agreement that will lead to a partial privatisation of power distributor, the Electricity Company of Ghana.
The Programme Implementation Agreement (PIA) under the Millennium Challenge Compact agreement, campaigners say, is fraught with serious problems.
Even though the Compact promises a juicy sum of $500m to fix Ghana’s deteriorating Electricity sector, a Coalition of stakeholders on the ECG concession agreement insists it is entirely possible for Ghana to access the entire amount and not see any significant improvement in efficiency of the Electricity Corporation of Ghana (ECG).
According to the Vice President of IMANI Ghana, Kofi Bentil, who looked at the legal implication of the concession agreement, of the $500 million promised under the compact, $300 million is to go into restructuring the governance system of the ECG, something he said has been done already.
This means, he argued, “all that money can be spent on ECG and we will end up with nothing, no improvement in the sector.
“If that is what will happen we should not waste our time,” he suggested, pointing to Ghana’s ability to raise an amount of $500million through its oil proceeds, invest it in the Electricity sector on its own terms without the express intervention by the Americans.
Mr Bentil was speaking about the US sponsored second Millennium Challenge Account programme, the Ghana Power Compact, with the government of Ghana.
Under that Power Compact, the Millennium Challenge Corporation will invest up to $498.2 million to transform Ghana’s power sector and stimulate private investment.
The aim of the five-year Ghana Power Compact is to create a financially viable power sector to meet the current and future needs of households and businesses, and to help fight poverty across the country.
The compact will play a critical role in Power Africa, the U.S. Government’s initiative to double access to power on the African continent. The Ghana Power Compact is the largest U.S. Government transaction to date under Power Africa, and will serve as an anchor for increased American engagement in Ghana. The compact was signed on August 5, 2014 and was supposed to have been enforced by September 6, 2016.
However, the Mahama-led administration decided to hold on to the implementation of the of the compact and the Nana Akufo-Addo led administration has decided to review it.
Speaking at a programme organised by the Coalition of stakeholders on the ECG concession, the IMANI Vice President stated neither himself nor IMANI has any problem with the Millennium Challenge Account.
As a matter of fact, ECG, having “catastrophically failed” in managing its own activities, needs some private participation and to that extent, any move to welcome private investors into ECG is in the right direction he argued.
However, Bentil posited the Programme Implementation Agreement (PIA) under the Challenge Account is what he disagrees with.
Having read the details of the PIA, the IMANI Vice President said there are clauses which are inimical to the interest of Ghana.
Quoting Article 7 (1) of the Compact Agreement which says the PIA shall not be subject to the laws of Ghana, Bentil insists that must not be accepted.
He argued the United States of America is notorious for exempting itself from international law. “Even when they go into other people’s country they want their laws to prevail.”
That must not be allowed to happen, he pointed out and suggested that no law, particularly a US crafted law must be made superior to the Supreme law of Ghana in the operations of ECG.
Kofi Bentil also raised issues about conflict of interest involving IFC, the advisors of the compact agreement.
According to him, out of six companies applying to manage ECG under the joint venture agreement, four of them are linked to the IFC.
He does not understand how the IFC, advising partners in the compact agreement will also have interests in companies seeking to manage ECG.
“The person advising the person we are going to deal is the person advising us,” he stated, and this must not happen.
Citing a portion of the agreement which gives right to the IFC to take monies from an escrow account in the event government fails to pay its debt to ECG, Bentil said if government can pay its debts faithfully there will be no point in agreeing to this compact agreement.
The forum also had representatives from ISODEC, PURC and other interest groups in the electricity sector speaking on the matter.