The minority in parliament has described as “shocking” and “astonishing”, plans by the government to spread the repayment of some debts in the energy sector over a 15-year period, through energy sector bonds.
In a press statement issued on Wednesday, July 5, Minority Leader Haruna Iddrisu said in an effort to deal with the perennial debt confronting the energy sector, the then National Democratic Congress (NDC) government introduced the Energy Sector Levy Act 2015 (Act 899) which was meant to consolidate all the existing levies into a properly structured revenue stream flow to deal with the debt stock in a comprehensive manner.
Mr Iddrisu said consequently, the NDC government through then-Minister of Finance, Seth Terkper, took appropriate steps to restructure the debt owed by industry players in the power sector which resulted in a renegotiation of outstanding obligations.
Tamale South MP explained that this led to the affected banks cutting their interest rates for both the cedi and dollar components. This move, he noted, culminated in a payment plan which was agreed upon by the various shareholders.
Based on detailed analyses conducted taking into account the upfront payment made, the entire debt stock was scheduled to be amortised over a period of three to five years, he explained.
According to him, the NDC government further made provisions for clauses which were aimed at terminating the levies upon completion of payment within the stipulated period.
Mr Iddrisu, therefore, pointed out that the introduction of the energy sector bonds by government “is certainly unacceptable as it is completely at variance with the intended repayment time period of a maximum of five years”.
“For the avoidance of doubt, the then-Minister of Finance, Seth Terkper, had started sanitising the Markets of Energy Bonds to finance the investment needs of the sector and wean them off central Government or Sovereign Guarantee,” he said, adding that these discussions were based on the self-financing rule for commercial projects.
“In the case of the energy sector, it would be based on ‘receivables’ or revenue from projects, such as the Thermal plants, not ESLA,” he emphasised.
“What at all informs the NPP Government’s strong affinity for bonds if not for self-gain?” he wondered, adding it must not be lost that the NPP, then in opposition, vehemently opposed the Energy Sector Levy promising to scrap same upon assumption of office.
“Why has the NPP woefully failed to honour this promise?” he queried.
For him, the Akufo-Addo/Bawumia government has capitulated and seeking to burden Ghanaians with a 15-year payment period.
“This singular act will span almost 4 successive Governments and Parliaments. How can an arrangement meant to liquidate a loan over 5 years in the previous administration metamorphose into 15 years under this administration?” he asked.
“We wish to state emphatically and unequivocally that the NDC Minority is vehemently opposed to this 15-year bond arrangement that appears to surreptitiously extend and impose the ESLA on Ghanaians for 15 years. Therefore, the NDC is serving notice that we oppose the measure and should the majority use its numbers to have its way, we shall review this decision, God-willing, upon assumption of office on January 7, 2021,” he emphasised.