Efforts to reduce legacy debt rolled-out
By Nana Ama Mensah
Big Ada, Sept. 27, CDA Consult – Mr. Leonard Akuffo-Kwapong, Lead Accountant of the Natural Gas Clearinghouse, has revealed that a mechanism has been activated which is aimed at further reducing the legacy debt and ensure financial viability in the energy sector.
Mr. Akuffo-Kwapong added that it was strategically designed to focus on revenue collection, emerging African markets, Natural Gas sustainability, and the energy sector legacy debt, noting that it also highlighted the importance of Ghanaian participation in the oil and gas sector.
He said oil and gas were a vital source of Ghana’s revenue, indicating that they have identified the importance of Ghanaian participation and local investment in the sector as well as the importance of the country owning its economic legacy.
Mr. Akuffo-Kwapong stated at a summit organized by the Energy Sector Recovery Programme (ESRP) which was on the theme; “The Role of Natural Gas on Ghana’s Sustainable Future,” and attended by accountants, lawyers, commercial experts, and other professionals within the energy sector which was monitored by the Communication for Development and Advocacy Consult (CDA Consult) at Ada.
The ESRP event dubbed Gas Accountants’ Business Summit was also to discuss the natural gas business in Ghana and its related issues to achieve a financially sustainable energy sector.
The ESRP was developed by the government of Ghana to address recurrent and projected financial shortfalls for both the power and gas sectors through a five-year implementation period commencing in 2019.
Touching on the gains of the ESRP, Mr. Akuffo-Kwapong disclosed that the combined role of the Natural Gas Clearinghouse and the Cash Waterfall Mechanism has ensured that State Owned Organizations (SOE) within the value chain have received full payments for the gas commodity, associated fees, and charges have been made whole between October 2020 to January 2022.
Mr. Akuffo-Kwapong added that they have also been able to reduce the legacy debt significantly without any extra payments by the government of Ghana, explaining that they tracked payments made by the government over the period and effected accounting entries through the gas-to-power value chain which eventually gave the government of Ghana its credit.
“In 2021 alone, we reconciled over USD $300 million which will go back to the Government of Ghana as a credit,” he said.
Mr. Akuffo-Kwapong said the ESRP has come to tackle the lack of transparency in the sector, which he stated was one of the issues that have added to the long-held legacy debt.
Professor Kwaku Appiah-Adu, ESRP Coordinator, and a Senior Advisor to Vice President Dr. Mahamudu Bawumia, chairing the summit the ESRP has natural gas clearinghouse concept through which it brings together all the revenue that comes through the gas value chain.
He said that based on that, they have a formula and a proportion that is used to distribute money to the various players in the sector, adding that with that they were able to make sure that there was equitable distribution of the monies.
He reiterated the importance of getting together with stakeholders in the energy sector to discuss pertinent issues.
Prof Appiah-Adu said it was also to strengthen the relationship between stakeholders in the sector to support reducing the energy sector debt while looking at the prospects of the natural gas sector.
Source: CDA Consult