Ghana is setting a $2-billion estimate for the restructuring of contracts with independent power producers to reduce the country’s bill for excess capacity and to settle arrears, according to two people familiar with the matter, Bloomberg News reported. While Finance Minister Ken Ofori-Atta already pledged to allocate $1 billion from February’s Eurobond sale, the country is also talking with multilateral lenders such as the World Bank to help raise a further $1 billion, said the people who asked not to be identified because the matter is private.
Ghana is considering to buy out the debts of independent power producers as a step toward restructuring contracts and reducing its power bill, according to people familiar with the matter, Bloomberg News reported. West Africa’s second-biggest economy currently pays as much as $500 million per year for power it doesn’t consume and is in talks to end the practice. Deals that obliged the government to pay for power regardless of whether or not the supplies were needed, have left the country with almost double the generation capacity it requires to meet peak demand of 2,700 megawatts.
Ghana is seeking to prosecute a former finance minister, industry regulator and deputy central bank governor in a bid to stamp out alleged collusion with company executives that helped contribute to the West African nation’s biggest banking crisis, Bloomberg News reported. The former officials are being charged along with nine other banking executives on charges ranging from money laundering to defrauding depositors in the aftermath of a three-year industry clean-up -- the costs of which could escalate to 20 billion cedis ($3.7 billion).
Ghana plans to use as much as $1 billion of the Eurobonds it sold last week to help restructure the country’s obligations to independent power producers, said Finance Minister Ken Ofori-Atta. The West African country is in talks to re-negotiate supply deals with the power companies known as IPPs, Bloomberg News reported. The currently take-or-pay agreements mean the government is billed even for unused electricity. “We are going to put about $1 billion aside from the proceeds of the Eurobond to look at how we resolve those IPP issues,” Ofori-Atta said in a broadcast on Joy FM.
Ghana’s efforts to raise domestic revenue are beginning to bear fruit and will help the country to be less dependent on debt, Finance Minister Ken Ofori-Atta said a day after the nation sold $3 billion in Eurobonds, Bloomberg News reported. West Africa’s second-biggest economy received about $15 billion in offers for the debt issuance that included a tranche of sub-Saharan Africa’s longest-yet Eurobond with an average life of 40 years. The sale would increase Ghana’s debt burden, which the International Monetary Fund estimated was 63% of gross domestic product at the end of 2019.
The cost of Ghana’s financial sector cleanup risks escalating to 20 billion cedis ($3.5 billion) as the government weighs increasing the guaranteed payback for some depositors, Finance Minister Ken Ofori-Atta said. The West African nation has approved funding of about 16.4 billion cedis since 2017 to help recapitalize the industry and safeguard depositors’ funds after the central bank revoked the licenses of nine insolvent lenders and 23 second-tier institutions, Bloomberg News reported.
Ghanaian prosecutors charged the chief executive officers of two defunct lenders for alleged crimes that contributed to a banking crisis that cost the West African nation 12.5-billion cedis ($2.2 billion) in bailouts, Bloomberg News reported. Michael Nyinaku, the former CEO of Beige Bank Ltd., appeared in the Accra Circuit Court on Tuesday on counts of stealing 341 million cedis and money laundering, court documents showed.
Ghana has too much power and gas, and that’s a bad thing for government finances. With capacity that’s almost double the country’s peak demand needs, Ghana’s electricity utility has to pay independent producers about $450 million every year for energy that it doesn’t need or use, Bloomberg News reported. This adds to the sector’s liabilities, which are the biggest debt threat to a nation that seven months ago completed its 16th bailout program with the International Monetary Fund.
The regulatory cleanup of Ghana’s lower-tier lenders that resulted in 23 companies being declared insolvent and losing their licenses could risk as many as 4,000 direct jobs, according to an industry body, Bloomberg News reported. The central bank announced last week it had revoked the licenses of savings and loans companies as well as finance houses and appointed a receiver to manage their affairs.
A total of 23 Ghanaian financial institutions have their licenses revoked because of insolvency, a statement from Ghana's central bank reached to Xinhua on Saturday, Xinhuanet reported. The 23 institutions were within the savings and loans as well as the finance house categories of the financial sector. Even after a reasonable period within which the Bank of Ghana has engaged with them in the hope that they would be recapitalized by their shareholders to return them to solvency, the statement said, the institutions had remained bankrupt.