An open letter to President Akufo-Addo
Dear President Akufo-Addo,
At the 2017 May Day parade, you as the Main Speaker, made the following remarks:
“In this regard, government has amended the terms of the concession agreement to require that: (1) Ghanaians own at least 51% of the concession; (2) there should be no involuntary lay-offs as a result of the concession; (3) the term of the concession would be reduced from 25 to 20 years. We believe that these amendments meet the aspirations of Ghanaians in protecting the jobs of workers and in assuring the control and viability of ECG.”
Mr. President, when you spoke those words in your May Day speech, I shouted, “oh no, he didn’t. He did not just utter out these words, did he?”. Mr. President, it is NOT true that your government has amended these terms of the concession agreement. My first point will be to ask you Mr. President, where in the MCA Compact II, under “Energy Compact” that the above is even captured? Clauses 1-3 are not captured anywhere in the Compact II.
Mr. President, you must recall that in 2009 when the then NDC Government came into power, they attempted to sack the then CEO, Mr. Martin Esson Benjamin. This was rejected by the Americans/MCC because their (NDC) arbitrary decision was not grounded in the treaty. You have committed the same offence of taking a unilateral decision not grounded in Law nor found in the Compact.
Mr President, Can a government in an international treaty amend terms of the Compact unilaterally? It cannot be done by any government in any civilized Nation unless of course, your government is led by Idi Amin Dada. In Section 6.4 of the Compact Entitled Governing Law, It states: “This Compact is an international agreement and as such will be governed by the principles of international law”. What are some of those basic principals? It is further stated in Section 6.2 under Amendments and Modifications that, “(a) The Parties may amend this Compact only by a written agreement”.
Mr President, Has your Government or MiDA written to the MCC Ghana or the United States Ambassador seeking to amend a portion or portions of the Compact? In any case, where are those portions you referred to in the Compact itself? Perhaps no one has drawn your attention to it, Mr. President.
It is not good for our President to be exposed to such potential ridicule and embarrassment because it will come to touch all of us as citizens of this Country.
On June 29th, 2016, I led a protest in Winneba against the sale /PSP/ Concessioner of ECG. https://www.myjoyonline.com/news/2016/June-29th/efutu-demonstrators-condemn-plans-to-privatize-ecg.php. At that time, I cited the Effutu MP as having voted for the compact II which had imbedded in it the intention to give ECG away to a private concessioner. This was even denied by the MP for Effutu on the grounds that he never voted for the passing of the bill. Time has vindicated me as the sale/concession/PSP is now a reality staring us in the face like the barrel of a loaded gun.
Section 7.2 Conditions Precedent to Entry into Force. Before this Compact enters into force: (d) The Government must have delivered to MCC evidence: (i) that the tender documents for an Acceptable ECG PSP Transaction have been released for competitive selection through an open and transparent process acceptable to MCC;
It further fascinated me to note that during the times of protest not a single NDC or NPP person supported my fight to liberate Ghana from this compact which places an anchor around our necks. So you can imagine my surprise, when Senior Minister Yaw Osafo Marfo during his vetting said Ghana WILL renegotiate the MCA Compact II. I did not know whether to weep or be excited. “So they knew it is a bad deal for Ghana and said nothing?”, I asked? Why did they not speak up when I was fighting for Ghana, ahhh lest I forget, we wear different political party colors. For me, it is Ghana First, Everytime.
When Minister Dr. Akoto Osei said in Parliament that it took three days for the Compact to be passed and that it was not read by many Parliamentarians, did people of Ghana not hear? It took three days because there was one day at the Ministry, one at the Presidency, and one in Parliament. When Dr. Akoto Osei went so far to show how the acronym for NEDCo was captured wrongly in the compact, did people not hear?
Mr. President, listen to the real problems of the Compact. It is stated in the Compact under Conditions: “Section 8.3(b) except for electricity bills subject to debt recovery actions, unpaid electricity bills incurred since the signing of this Compact owed to ECG and NEDCo by the Agreed MDAs, will not be more than sixty (60) days past due.” What this essentially means is that although many institutions are behind 3 to 4 quarters in disbursements from government, if they do not pay their bill in 60 days they will be cut off. This is good when you have a Government financial system that disburses real time to MDAs. If not, how will they be able to pay their bills? Another logical question is why can’t government rephrase the law that sets up ECG to give them this mandate to operate? The 60 day ultimatum power cut to be conferred upon the concessioners should be given to the ECG to help them with their debt recovery procedures.
The Compact mandates that government should pay to the concessioner the debts owed by MDAs. Minister Akoto Osei also raised this point in the Ghana Parliament. How much exactly is owed to the ECG by MDAs for which Government has agreed to pay to the concessioner? At a public accounts committee presided over by Minister Agyeman Manu, on May 31, 2016, It was disclosed by ECG officials, however, that “the Government and other clients, as at the end of 2014, owed the company 1.6 billion Ghana cedis, with the Government alone taking the chunk of almost one billion Ghana cedis.” Government owes 950 million Ghana Cedis whiles Individuals, corporate institutions and other clients owed over GH¢ 650 million Ghana cedis. Mr. Frank Annor Kwafo, the Director of Finance, said the debt owed by the Government was as a result of non-payment of electricity bills by agencies under the Government and its inability to redeem electricity subsidies to the company.
Mr. President, these are the figures as at the end of 2014. We are now in 2017. If I do simple arithmetic and divide 950 Million Ghana Cedis by an exchange rate of 4.2, we get $226,190,000 we have to pay as a nation to the concessioner. If we paid this money to the ECG can they not invest in a manner that will improve billing and collection?; Improve wastages in the system?; Invest in technology to improve the monitoring of the entire system?
Ghana is getting $498M from Compact II, but as at end 2014 we owed ECG $226.2M. The debt stock continues to rise and I do not know today’s government debt profile to ECG. Government has to pay counterpart funding of $37.4M. If we add 2014 figure plus counterpart funding we net a difference of $263.6M.
Mr. President, is it worth selling ECG for $263.6M? This is the total value of the compact. This is what you need to change in the Compact. This is what’s in the compact and not what you mentioned earlier.
The PURC will be rendered impotent and toothless because the PURC shall review tariffs on a quarterly basis as dictated by the compact to reflect the true cost of electricity. There shall be no government subsidy because any subsidy from government will go against the Compact. It is ACT 538 which gives the PURC the sole power to adjust utility tariffs in the Country. The PURC adjustments take into account various reasons such as:
Section 16 – Guidelines for Fixing Rates.
(3) In preparing the guidelines the Commission shall take into account
(a) Consumer interest; (b) investor interest; (c) the cost of production of the service; and (d) assurance of the financial integrity of the public utility.
The consumer interest will be taken away and left only with cost of production of the service, investor interest and assurance of the financial integrity of the public utility.
Mr. President, please pay attention to the real issues regarding this compact and act Presidentially. Ghana does not belong to two parties. Others too have a mind to share for the development of the state. What happened to an all inclusive mind set to develop this nation? Seek opinions from non sycophants, listen to the voice of the people because they say, they are the voice of God. This Compact will not help Ghana to grow!!!!!!
Nana Ofori Owusu