The Africa Centre for Energy Policy (ACEP) has disclosed that the current IMF conditionalities for Ghana will not help address revenue leakages in the energy sector.
A report issued by the energy think-tank and dubbed, 'Protecting Ghana’s Economic Sustainability in the Face of Power Sector Risks,’ noted that certain conditionalities already being implemented are reflected in the country’s revenue mobilisation
It further outlined that despite 100 percent hikes in electricity tariffs over the past 10 months, there remains a liquidity issue that is confronting the energy sector.
“The IMF conditionalities are already being operationalised, primarily based on the theoretical assumption that raising tariffs would enhance the sector’s liquidity. From September 2022 to June 2023, tariffs have increased by approximately 100%, a situation that could never have been possible without the IMF programme," the report said.
It continued, “However, liquidity has worsened. The Cash Waterfall Mechanism (CWM), implemented to improve liquidity, has failed to achieve its objectives in two key areas: ensuring proportional distribution of revenues and enhancing revenue collection.”
The ACEP report also highlighted that despite numerous funding facilities granted by the US government and African Development Bank (AfDB), the energy sector still faces inefficiency issues which has resulted in revenue and distribution losses.
“The world bank has spent on the Energy Sector Recovery programme for four years and failed to reduce inefficiencies. The US government spent about $308 million through the MCC Compact 2, and other interventions through Power Africa,” it noted.
The report continued, “AFDB has supported the PURC on regulatory efficiency and transparency. Nonetheless, the sector has deepened in inefficiency and drained the public resource in that period more than ever.”
Benjamin Boakye, Executive Director at ACEP
