President John Mahama arriving in his office during his first day at work
Source: Africa Publicity
Ghana is set to renegotiate with the United States government for the possible reinstatement of $190 million under the Millennium Challenge Corporation (MCC) compact, initially allocated to the electricity sector.
The announcement was made by President John Dramani Mahama during a courtesy call by Mr. Ousmane Diagana, World Bank Vice President for West and Central Africa.
President Mahama emphasized the need to address inefficiencies in the energy sector, particularly in the Electricity Company of Ghana (ECG). He noted that the MCC compact, signed during his tenure as Vice President, aimed to make Ghana a leader in electricity production and a regional power hub.
However, the project was disrupted by political transitions, and the last segment of the compact, focusing on efficiency in distribution, billing, and metering, was not completed. President Mahama expressed his intention to revisit the privatization of electricity distribution to infuse private-sector efficiency into the sector.
The President revealed that initial discussions with the MCC indicate that a reopening of talks is possible, with the MCC stating that “the door is not closed.” Ghana will actively pursue this opportunity, and if unsuccessful, will seek alternative support from the World Bank to complete critical reforms and reduce electricity losses.
Mr. Diagana reaffirmed the World Bank’s commitment to supporting Ghana’s socioeconomic development agenda, ensuring efficiency and sustainability in the country’s energy sector.
In the short term, President Mahama committed to restoring transparency in the system and reactivating the cash waterfall mechanism to stabilize the situation until all reforms in the sector are implemented.
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