GCGP judgment debt damaging to Ghana’s reputation, finances – IES fellow
The Institute for Energy Security (IES) has said the looming US$134 million judgement debt likely to hit the Government of Ghana is one that is damaging to the country’s reputation and finances.
The development comes after government cancelled a contract agreement with an emergency power firm, GCGP Limited under the former Energy Minister, Boakye Kyeremanteng Agyarko’s tenure in office.
Following the cancellation, the company filed a suit against Ghana to the International Court of Arbitration seeking damages for the cancellation. The court eventually ruled in favour of the firm and included an additional US$30 million in interest payment obligation.
Reacting to the ruling, the IES bemoaned the decision as rather unfortunate and one that could trigger a significant financial loss on the state.
Beatrice Annan who is a fellow at the IES told Citi Business News, “it means that the country will have to use taxpayers’ money in excess of US$134 million to pay the foreign entity, which is GPGC. It further means that as a struggling economy as we are, government will have to cough up another US$30 million to pay interest.”
“Beyond the financial damage that has been caused to the country is also the reputational damage where to the international community today, a change in government will mean discontinuity in government business. And so the international community will begin to look at Ghana with another eye and for us, we think that it is not a good brand to build as a nation,” she emphasized.
Ghana in 2015 signed an energy agreement with GCGP Limited to improve the country’s energy sector.
The deal was however cancelled by the former Energy Minister, Boakye Agyarko on the basis that it was not in the best interest of the country and could only lead to unwanted debts in the energy sector.