The Akufo-Addo administration has said it has so far paid an amount of US$3.6 billion in the past seven years for the alleged ENI Sankofa gas pipeline deal signed by the Mahama administration.
The director of public affairs at the Ghana National Gas Company Limited (GNGC), Ernest Owusu Bempah who was briefing journalists in Accra on Tuesday 1 November 2022 said that the contract was the most expensive gas deal globally.
On a monthly basis, he said Ghana is paying US$46 million, making it US$552 million yearly.
He said the contract was also signed for over two decades.
The Akufo-Addo government had no choice but to continue with the contract when it came into office because of the terms and conditions, he said.
“This contract was signed for 20 to 25 years, monopoly for that period and the IMF questioned it,” he said.
“We wouldn’t be going to the IMF but for some of these reckless dubious contracts signed by the Mahama administration,” he said.
Bempah said that the contract is partly to blame for the current economic challenges facing the country. The government is unable to reduce cost of electricity for thermal generation, he added.
Former president Mahama signed the agreement with ENI and Vitol Energy at the Peduase Lodge near Aburi in 2015.
This was, at the time, probably the biggest single largest foreign direct investment in West Africa and indeed Ghana since independence.
The project was situated in the Western Region.
The oil production from the offshore cape three points was estimated at 80,000 barrels per day.
Recently, the World Bank country director, Pierre Frank Laporte identified losses in the energy sector of the economy as one of the challenges that forced Ghana into a situation where it is now seeking support from the International Monetary Fund (IMF).
“The big issue has been on the fiscal side. Before the current crisis happened, we observed certain challenges on the budget side that really has been the area more hit by everything. Also, where actions are required now to deal with them.
“For instance, on the revenue side we have always been saying that this is an area where Ghana should do better. We are encouraged by the fact that this should be one of the areas for potential programme and support from the World Bank. The problem is fiscal, not just revenue.
“The problem is that there are also spillovers from other sectors. For instance, the energy sector. There is about one billion dollars going to the energy sector because of losses. The sector itself is not financially viable and to keep it going you have to subsidise.
“Actions are required. Of course, with COVID, the general business environment is been a bit more difficult,” he said.
Source: Daily Mail GH