$3.6bn Paid for Mahama’s Alleged Sankofa Gas Pipeline ‘Dodgy’ Deal – Ghana Gas

The Akufo-Addo administration says it has so far paid $3.6 billion over the past seven years for an alleged ENI Sankofa gas pipeline deal signed by the Mahama administration.

Public Affairs Director of Ghana National Gas Company Limited (GNGC), Ernest Owusu Bempah, briefing reporters in Accra on Tuesday, November 1, 2022, said the contract was the most expensive gas contract in the world.

He explained that on a monthly basis, Ghana pays $46 million, making it $552 million per year.

According to him, the Akufo-Addo government had no choice but to continue with the contract when he took office due to the terms and conditions, he said.

“This contract was signed for 20 to 25 years, a monopoly for this period and the IMF questioned it,” he said.

“We wouldn’t go to the IMF without some of these reckless questionable contracts signed by the Mahama administration,” he said.

Mr. Owusu Bempah further explained that the contract is partly responsible for the current economic challenges facing the country.

“The government is unable to reduce the cost of electricity for thermal generation,” he said.

Former President Mahama signed the deal with ENI and Vitol Energy in a ceremony at the Peduase lodge near Aburi in 2015

This was, at the time, probably the largest foreign direct investment in West Africa and even in Ghana since independence.

The project was located in the West region.

Oil production from Cape Three Points offshore was estimated at eighty thousand barrels per day.

Recently, the Country Director of the World Bank (Ghana), Pierre Frank Laporte, mentioned losses in the energy sector of the economy as one of the challenges that have forced Ghana into a situation where it is now seeking support from the International Monetary Fund (IMF).

Mr. Bempah referred to a recent interview with the country’s World Bank chief, Mr. Laporte, who said losses in the energy sector compound the challenges.

“The big problem has been on the tax side. Before the current crisis happened, we observed some challenges on the fiscal side which were really the most affected area of ​​everything. Also where action is needed now to address it.

“For example, on the revenue side, we have always said that this is an area where Ghana should do better. We are encouraged that this should be one of the areas for potential programs and World Bank support. The problem is fiscal, not just revenue.

“The problem is that there are spillovers from other sectors as well. For example, the energy sector. There’s about a billion dollars going to the energy sector because of the losses. The sector itself is not financially viable and to maintain it requires subsidization.

“Action is needed. Of course, with Covid, the general business environment has been a bit more difficult.

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