GH¢17 billion in Energy Sector Capacity payments were made in the last five years [2018 to 2021]
Verdict: TRUE
Explanation:
Vice President Mahamudu Bawumia has claimed the Akufo-Addo administration has in the last five years honored some obligations towards Energy Sector Capacity payments.
Speaking at a public lecture at the NPP’s TESCON event on April 7, Dr. Bawumia touched on three major expenditure items that have contributed to the country’s fiscal deficit and increasing public debt stock.
Dr. Bawumia explained these were due to the coronavirus pandemic, financial sector clean-up exercise and Energy Sector Capacity payments, of which government has paid GH¢17 billion for in the last five years 2018 to 2021].
He pointed out these energy agreements were signed by the erstwhile John Dramani Mahama administration and passed on to the current government [Nana Addo Dankwa Akufo-Addo] to fulfill.
“Indeed, in addition to COVID-19 there were two major items of expenditure that are critical to understanding the evolution of the fiscal deficit and the debt stock: the Banking Sector Clean up and the Energy Sector Excess Capacity payments,” Dr. Bawumia said.
Dr. Bawumia during the lecture provided data which showed that the three items of expenditure cumulatively amounted to GH¢50.1 billion (the equivalent of some US$7 billion), which was borrowed.
“Between 2019 and 2021, Ghana’s debt to GDP increased by 17.6 percentage points of GDP. It should be noted that without the 15.1 billion of the exceptional items – the financial sector and then the energy and Covid Ghana’s debt to GDP would have been about 68 per cent instead of the current 80 percent,” he added.
Meanwhile, following the public lecture, the opposition National Democratic Congress has disputed the figure suggesting an earlier US$937 million figure given out by the finance minister [Ken Ofori-Atta] in response to a question in Parliament back in 2021.
Verification
Checks from the Ministry of Finance have revealed that the figure of GH¢17 billion as indicated by the Vice president [Bawumia] for energy sector excess capacity payment actually is accurate.
Data from the ministry's and indicated in the Vice President's address put the expenditure on three exceptional items into perspective as against the total expenditure government made on some of its key flagship projects such as the Free SHS, 1D1F among others.
The data (Table 6) shows that the expenditure on these flagship programs over the five-year period between 2017 and 2021 amounted to GH¢15.62 billion compared to the GH¢50.1 billion expenditure on the three exceptional items.
The expenditure on the three exceptional items amounted to more than three times the expenditure on the flagship programs in Table 6.
Conclusion
Following these checks and data provided, the GhanaWeb Factcheck desk find Dr Bawumia's claims on the Energy Sector Capacity payments as true.
Vice President, Dr. Mahamudu Bawumia