Veep worried over high fuel prices on economy

Accra, Nov.14, GNA- The Vice President, Alhaji Aliu Mahama on Tuesday observed that the recent price hikes of crude oil is threatening the macro-economic gains, which the country had recorded within the past three years.

"These gains include a phenomenal lowering of inflation from over 50 per cent in 2001 to almost a single digit by the end of 2005. This feat and associated benefits were quickly undermined by the steep rise in crude prices on the world market at the beginning of this year," he said.


Alhaji Mahama was speaking at the end of a two-day Regional Workshop on Financing of Bio-Fuels and Jatropha Plantation projects in Accra, on the theme: "Financing Bio-Fuels and Jatropha Plantation Projects With Special Emphasis On Clean Development Mechanisms." He said Ghana was determined to develop renewable energy as an alternative source to crude oil, adding that: " The focus is on bio-fuel, solar, wind and hydro energy."


He said such a project in West Africa would promote further cooperation between the Economic Community of West African States (ECOWAS) to reduce the stress on the fragile economies of the Sub-Region and free funds for investments in infrastructure and social services. The Vice President said the creation of a Bio-Fuel Fund for Africa would be the first step to help the continent to develop the quest to reduce the use of fossil energy in favour of cleaner sources of energy.


The workshop was organised by the United Nations Conference on Trade and Development (UNCTAD) and the ECOWAS Bank for Investment and Development (EBID) with collaboration and support of the Common Fund for Commodities.

The workshop was aimed among other things at consolidating strategies and adopting a regional approach for the promotion and development of bio-fuels in Africa.


Professor Dominic Fobih, Minister of Mines, Lands and Forestry said the Indian government had committed 250 million dollars towards the development of bio-fuel in Africa. He said the over 200 participants at the workshop had helped to streamline the successful initiatives in the development of bio-diesel to replace fossil fuel.


Mr Olle Ostensson, UNCTAD Chief Director of Commodities Branch, acknowledged Ghana's leading role in encouraging Jatropha plantation. Bio-diesel is obtained from the conversion of natural oils such as vegetable oils and animal fats. Jatropha oil has been found to produce very high quality bio-diesel.


Mr Ostensson said by 2030 over million people in Africa would live without electricity, hence the need for the continent to explore alternative sources of energy at the backdrop of climatic changes, which has the potential of undermining industrial output. Mr Christian Adovelance, President of the Bank of ECOWAS said in a speech read on his behalf that the increase of fuel prices from 40 dollars to 70 dollars within the past two years had affected industrial output and led to high budgetary commitments from governments in the Sub-Region.