The Chairman of the United States House Foreign Affairs Committee, Brian Mast, has intensified calls for accountability in Ghana’s financial dealings with Independent Power Producers (IPPs). In a letter addressed to U.S. Treasury Secretary Scott Bessent, Mast urged that a portion of Ghana’s upcoming International Monetary Fund (IMF) disbursement be earmarked specifically for settling arrears owed to IPPs, some of which are partially funded by U.S. pension funds and taxpayers.
Mast expressed concern over Ghana’s persistent failure to meet its financial obligations under the terms of its current IMF-supported program, emphasizing that these unpaid debts threaten not only the stability of the country’s power sector but also the confidence of American investors.
Mounting Arrears and Missed Commitments
The letter highlighted Ghana’s growing arrears to IPPs, which have become a point of contention. Among the affected entities are Twin City Energy and Early Power Ltd., both of which received recent payments from the Electricity Company of Ghana (ECG) in Ghana Cedis. While these payments of approximately $5.5 million each marked progress, they fell short of the anticipated $7.5 million owed to the companies.
This financial shortfall has sparked fears of operational disruptions within the power sector, compounded by the implications for American investors who have a vested interest in Ghana’s energy infrastructure.
Criticism of Ghana’s Economic Recovery Plan
Chairman Mast also cast doubt on Ghana’s broader economic recovery strategy, referencing a briefing by former President John Mahama’s advisory team. The team outlined priorities such as rebuilding reserves, ring-fencing funds, and refinancing government obligations, but Mast criticized these as superficial solutions lacking actionable follow-through.
“President Mahama does not appear to be listening to his advisors,” Mast wrote, accusing the government of prioritizing reserve accumulation over the urgent need to clear power sector debts. He warned that this approach could deter future American investments and worsen the operational challenges faced by IPPs.
Linking IMF Support to Debt Resolution
Mast’s call aligns with previous advocacy efforts during the 118th U.S. Congress, which conditioned IMF support for Ghana on resolving IPP arrears. He has now recommended that the incoming U.S. Executive Director to the IMF formally request that part of the next disbursement be dedicated explicitly to settling these debts.
“I believe such a measure is essential to keeping American investors interested in Ghana, addressing the ongoing financial strain on IPPs, and ensuring the stability of Ghana’s power sector,” Mast stressed.
Broader Implications for Ghana’s Power Sector
The IMF’s next review mission to Ghana is scheduled for April, with potential board action anticipated in June. Observers note that Mast’s intervention reflects broader concerns about the sustainability of Ghana’s power sector and its ripple effects on economic stability and investor confidence.
As Ghana continues to grapple with its fiscal challenges, the focus remains on whether the government can balance its IMF commitments with the urgent need to stabilize its energy sector and reassure international investors.
Story by: Mercy Addai Turkson #ahotoronline.com
