By: Prof Lungu
In our 6th July essay titled, "There Was No 'Dum-Sor' Under Kwame Nkrumah!", we discussed the contract to privatize valuable parts of the Electricity Company of Ghana (ECG), but not the outstanding debt owed to ECG by government. This was in reference to the contract the Mahama administration signed last year with the Millennium Challenge Corporation (MCC), a US-taxpayer funded agency that promotes trade and exports for the US. That contract itself is now the subject of a contentious debate in Ghana's Parliament because it turns out the "MCC deal was approved without proper scrutiny" (CitiFMOnline.com, 9th July, 2015).
Our review of the "Ghana Power Compact" that was signed 5th August, 2015, by Seth Terkper, Mahama's Finance Minister, provides some rather unsettling insights. Again, suffice to say that the entire $535.6 million initiative ($38 million self-funded by Ghana), is strangely absent-minded of the Renewable Energy factor (i.e., Photovoltaic (PV) Solar power or Bio-Mass/Solid Waste power). In fact, the development of Solar Energy is discussed just once, practically as a foot note, in the 75-page MCC "Second Compact with Ghana", thus:
"...support pilot tests and demonstrations of distributed applications (photovoltaic back-up power, solar powered street lighting) focused on Government electricity customers to reduce electricity consumption in Government facilities..".
To put it mildly, that contract could have been a lot better for Ghanaians!
Fact is, because of multiple factors, among them (1) unreliable power production and distribution systems, (2) proven negative impacts of climate change on humans and infrastructure, and (3) unavailability and higher cost of coal, natural gas, and even water, (yes, you need water to produce natural gas, coal, nuclear power, and of course, even hydro power), solar power is increasingly becoming the fastest growing energy source in many parts of the world. This includes the United States. In fact, due to the dramatic reduction in the cost and reliability of solar panels and innovations in that technology:
"...U.S. solar power grew by 6.2 gigawatts in 2014, a 30 percent increase over the previous year and representing nearly $18 billion in new investment,...solar accounted for 32 percent of the nation's new generating capacity in 2014..." (Scientific American).
Now, balance "6.2 gigawatts" solar power generation capacity in the US with the combined power-generation output of all Ghanaian governments of just 2,936MW nearly fifty (50) years after Nkrumah. Simply, Ghana's power production is not adequate or reliable enough because of the sources of the power and required resources (i.e., water, natural gas, Nigeria), and the "Dum-Sor Bioyin Syndrome" we enumerated in our 6th July essay.
Having some experience and background in this area and with knowledge of the Mahama-MCC contract, we were not surprised when exactly three (3) days ago, on 7 July, we read that the Obama administration was set to announce:
"...(A)n initiative to help low- and middle-income Americans gain access to solar energy, part of a series of steps President Obama is taking to tackle climate change...The administration...intends to triple the capacity of solar and other renewable energy systems it installs in federally subsidized housing by 2020, make it easier for homeowners to borrow money for solar improvements and start a nationwide program to help renters gain access to solar energy...(It is )...part of a bigger-picture effort to try to drive innovation" toward cleaner, low-carbon energy solutions. Also to be unveiled...are commitments totaling more than $520 million from charities, investors, states and cities to pay for solar and energy-efficiency projects for lower-income communities...the programs would not only help the planet but also save money for those who could not otherwise gain access to renewable energy. The difference in a monthly bill of $10 or $15 means a lot to the people..." (Report by Julie Hirschfeld, NYT, 2015).
The reader should carefully note additional "commitments totaling more than $520 million", for solar energy in the US, as we move on!
We were not the least bit amused, however, when we could not fathom how people living in the United States where Gross National Income (GNI) per capita in 2013 was $53,750.00 could ever be poorer than people living in Ghana where the GNI per capita was $1,770.00 during the same period. But, instead, it is those in the US, the more deserving, who need access to solar power, not people in Professor Emeritus Allotey's Ghana. For all it is, that is the message for Ghana, from Mr. Mahama and Mr. Terkper. (We will take up the matter of Professor Emeritus Allotey of Ghana in due course).
So, totally lost to us is how proud, professional, independent, and assertive Ghanaian officials acting in good faith on behalf of Ghana could agree to that bizarre US-centric, fossil-fuel-dependent energy initiative that limits development of solar Renewable Energy (RE) to a "pilot test" that itself is limited to "government facilities". Consider that according to the same Mahama government, in 2013, "less than 1% of installed generation capacity... was in the form of solar grid-intertied capacity...". (In fact, most likely, the true, no-kidding answer to that question would be precisely 0% (as in zero per cent!).
As we reported 6th July, our review of the MCC contract told us:
1. The MCC power initiative absolutely DOES NOT discuss wooing Ghanaians from the national electric grid using cheaper, more sustainable forms of renewable energy
2. The MCC power initiative absolutely DOES NOT address facilitating off-grid energy capacity for rural areas utilizing products and equipment available from countries other than the United States at lower prices
3. The big talk about "reform" of ECG is totally divorced from the Government of Ghana actually fulfilling its obligations to the ECG by simply paying the $375 million debt the government owes to the ECG
4. Although the MCC agreement was signed in August of 2014, it is only recently that the Mahama administration has begun to discuss privatization of the ECG as stipulated in that agreement.
Question is, when $375 million owed by government to the ECG represents about 60% of all arrears owned to the ECG by all customers (including industry), why is it that Mr. Mahama is not ready to pay?
Further, how is it that an MCC agreement worth $498 million in loans comes with over $133 million in tax free "holiday benefits" to private interests during the 5 years of the program? But, at that same time, Ghana must contribute $37 million to make the program whole and workable, in addition to guaranteeing the MCC loans.
Turns out the new/extra "commitments totaling more than $520 million" by the US for solar energy alone is just $15 million shy of the $535 million MCC contract. But there is an important condition to the MCC contract: Solar power generation in Ghana shall be merely a "pilot test" that is itself limited to just "government facilities".
Therefore, we may all conclude that rather than concentrating on solving the bread-and-butter problem of electric-power generation to the desired levels of reliability and sustainability, Mahama's NDC government has on top, signed a contract to purchase 5 military jets from Brazil. Cost for the jets is in excess of $55 million. Operating each of the aircraft for one hour is approximately $475.00. Assuming there are 20 pilots and each require 150 hours flight time per year, we get an expenditure of $7.1 million for the 5 military just in just the first 5 years of ownership.
The question then is, how come the Mahama administration does not have a Solar Energy plan that uses just 50% of the aircraft expenditure with the objective of increasing off-grid solar power generation for towns of a certain size? Couldn't Ghana use that solar power generation capacity to power street lights, public schools, community power charging and learning centers; to improve student performance; to spur industry; to control migration to Ghana's over-burdened, under-planned, largest cities, to reduce demand on ECG power, etc.?
But no!
Rather, Mr. Mahama has proposed privatizing the more economically valuable assets of the ECG through the MCC contract, just as Mr. Kufour gave away Ghana Telecom's fibre-optic network to Vodafone for a song, as well, as part of the privatization of Ghana Telecom. (We must remind the reader that the ECG is still a state enterprise originally charted by Kwame Nkrumah and his CPP government, just as Ghana Telecom was).
So, with all these factors , ails, and sicknesses, one must also ask how and why Mr. Mahama could prioritize more than $50 million for those 5 military aircraft over an indigenous, multi-faceted solution to the Ghana power problem given that over 60% of ECG arrears ($375 million) is still a bill for the Government of Ghana to pay.
Might there be a Professor Emeritus Francis Kofi Ampenyi Allotey factor, em, an "intellectual" factor to all of that?
Alternatively, could it be that either the politicians will just not listen to the professional civil servants with respect to how best to prioritize limited "energy funds", most of that being interest-bearing loans; that the politicians simply will not take good counsel from the civil servants; or that the civil servants, among them intellectuals like Professor Emeritus Allotey, either have no clue, or they just do not believe solar power is a resource worthy of any government expenditure in 2015, or the next 5 years?
In this case, we will remind the reader that in a report by Starfmonline,com this year, on 5 March to be exact, Professor Emeritus Allotey, "a renowned Mathematician and Physicist:
"...told Starr Chat host Bola Ray that although going Solar can help solve Ghana’s energy problems, it is too expensive for the country to explore now. According to him, solar has also not proven to be completely reliable in resolving energy deficiencies. 'Solar is good but technology is not quite proven yet, so I will not advise that now'...Another argument is that, it’s too expensive so it will be the energy for the future, but not now,” (StarFMOnline.com).
Suffice for us to state today that given the literature on this rather narrow subject, Professor Emeritus Francis Kofi Ampenyi Allotey has absolutely no clue.
Professor Allotey has absolutely no credibility on this one!
In closing, we will further state that there is always a precautionary note in these high-stakes games that affect the fortunes of small countries with little political power, vis-a-vis export-oriented MCC-type agencies and privatization "engineers" such as the IMF and the World Bank.
The MCC-type agencies and privatization "engineers" never have to bear the cost of privatization when as everything is still failing apart, national fortunes and tax free benefits are nonetheless siphoned as profit overseas to the disadvantage of the weak, the poor, and the powerless in poor, but hugely resource-rich countries like Ghana (and Nigeria). Nigeria, after all, spent over $20 billion to privatize state-owned NEPA (National Electric Power Authority). Today, after 15 long years, Nigeria has just as much power generation capacity as it did on the day they signed the contracts to privatize NEPA.
Can Professor Allotey's Ghana truly stomach solar power for the poor in the United States, but not for the people in Professor Allotey's Ghana?
That, we submit, is the question all conscious Ghanaians and Ghana supporters must answer to their hearts' delight, or bewilderment, depending on where they sit!
So it goes, Ghana!
SOURCES
1. Prof Lungu. There Was No "Dum-Sor" Under Kwame Nkrumah!, 6 July, 2015, http://www.ghanaweb.com/GhanaHomePage/features/browse.archive.php?date=20150706 .
(Find a copy of the final paper, "There Was No "Dum-Sor" Under Kwame Nkrumah!", with graphics, under "Prof Lungu says....", on www.GhanaHero.com, at: http://www.GhanaHero.com/Visions .
2. GhanaHero.com. WWW.GhanaHero.com/Visions. Visit for more information.
3. CitiFMOnline. MCC deal was approved without proper scrutiny – Akoto Osei, CitiFMOnline, 9 July, 2015,
http://citifmonline.com/2015/07/09/mcc-deal-was-approved-without-proper-scrutiny-akoto-osei/
3. Ghanaweb. Gov’t holds consultation on privatisation of ECG, General News, Ghanaweb, 22 June 2015.
4. Ghana News Agency. Defend party’s achievements – Minister tells NDC youth, Politics of Tuesday, 26 May 2015, Ghana News Agency
5. Millennium Challenge Corporation. Second Ghana Compact, 5 Aug, 2014, https://www.mcc.gov/pages/countries/program/ghana-power-compact
6. Cusick and ClimateWire. Solar Power Sees Unprecedented Boom in U.S., Daniel Cusick and ClimateWire, 10 March, 2015, http://www.scientificamerican.com/article/solar-power-sees-unprecedented-boom-in-u-s/
7. Julie Hirschfeld. White House Solar Plan Aims at Low- and Middle-Income People, Julie Hirschfeld Davis, 7 July, 2015. http://www.nytimes.com/2015/07/08/us/white-house-solar-plan-aims-at-low-and-middle-income-people.html?hp&action=click&pgtype=Homepage&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0 .
8. StarFMOnline.com. Solar energy too expensive for Ghana now - Allotey, StarFMOnline, 4 March, 2015, http://www.starrfmonline.com/1.2018251
9. Norimitsu Onishi. Weak Power Grids in Africa Stunt Economies and Fire Up Tempers, New York Time, 2 July, 2015, http://www.nytimes.com/2015/07/03/world/africa/weak-power-grids-in-africa-stunt-economies-and-fire-up-tempers.html?_r=0.
©Prof Lungu is Ghana-centered/Ghana-Proud. Prof Lungu is based in Washington DC, USA. Brought to you courtesy www.GhanaHero.com©11 Jul 15.
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