Movenpick Hotel, Accra
Honorable Minister of Finance and Economic Planning, Mr. Seth Terkper
Other honorable ministers and deputy ministers,
USAID-Africa Deputy Assistant Administrator, Ms. Oren Whyche-Shaw (SHAW,
Distinguished partners and friends:
My first 90 days in Accra as Ambassador have been exciting! I have been busy meeting with leaders representing Ghana’s government, private sector, and civil society groups. I have toured the urban development of La here in Accra; met with students from the Kwame Nkrumah University of Science and Technology in Kumasi; visited the Eastern Region; and met with local farmers in their corn and rice fields in the Northern Region. I have been charmed by this beautiful country and its hospitable people. There are many, many other places I want to go and people whom I have yet to meet. I know that I still have much to learn. However, one thing has become very clear to me as I have engaged with people throughout the country these last few months: our bilateral Partnership For Growth initiative is targeting two of the most critical issues facing Ghanaian citizens today: 1) Access to reliable power, and 2) Access to affordable credit. As I travel around this country and meet with established business leaders, as well as aspiring entrepreneurs, they all seem to share the same story. They can’t grow their businesses and compete in the international market without a reliable power supply and access to affordable credit.
We are making strong inroads on the power issue. We have worked together and we have worked hard to make significant progress on increasing the reliability of power here in Ghana. Over the past several months, more than 600 megawatts of new generation capacity was added to the nation’s power grid. More is projected to come online in the months ahead. Unquestionably, this made a difference in reducing “dumsor” from its troublesome levels of a year ago. President Obama’s Power Africa Partnership, which is the operational and financial muscle supporting the PFG, continues to benefit Ghana. Through USAID we have technical experts embedded within the Ministries of Power and Petroleum. The U.S. government is working hand in hand with our Ghanaian counterparts as we tackle much-needed reforms in the power sector, including:
- Mitigating the risk for private sector investment,
- Addressing the issue of the sector’s massive circular debt and past arrears,
- Implementing a transparent tariff-setting process that enables stakeholder scrutiny and appeal; and
- Restructuring the distribution sector to make it more efficient and better prepared to handle the demands of a growing middle-income country.
In August 2014, our two countries came together in Washington to sign our second Millennium Challenge Corporation Compact. When this group last met in December, we were optimistic that this Compact would enter into force by March of this year. Although, significant progress has been made, another target date has slipped by. I must tell you, the wait has been far too long. The citizens of Ghana are waiting to benefit from this Compact—nearly $500 million that will directly strengthen the power sector by creating an enabling environment for investment and improving the creditworthiness of Ghana’s electrical utilities. We have achieved many milestones over the past three months: Ghana’s Cabinet approved the ECG Private Sector Participation Memo in February. The Request for Qualification document was released in April. However, there is still more that must be done, including approval of the Gas Master Plan and the release of the request for proposals for the ECG concession.
Let’s not let this opportunity slip away. Let’s commit that everyone in this room will do whatever is necessary to ensure we hit our target date of June for the Compact’s Entry into Force. The next time this group meets, I hope we are talking about plans and actions for the ECG transition and preparing for a concession agreement in 2017. I hope that we will discuss the specific activities planned for the inaugural year of the Compact.
Increasing access to credit is another challenge facing the citizens of Ghana. We need to redouble our efforts to tackle the credit issue. Inflation in March rose to 19.2 percent. The policy rate is at 26 percent. Interest rates for small and medium enterprises seeking loans to expand their businesses can be anywhere from 30 to 60 percent or higher. One of my primary objectives is to see our two nations double our bilateral trade. We certainly want the opportunity to sell more American goods and services in the Ghanaian market. We also want to see Ghana develop its manufacturing sector and increase its exports to the United States through programs like the African Growth and Opportunity Act, which our Congress recently renewed for another 10 years. I do not have any easy solutions to share. I know that the Government of Ghana has been exploring the possibility of developing an Export-Import Bank that may help in this area. I look forward to our discussions today. They may shed more light on this proposal, and perhaps we can explore opportunities to collaborate and make it a reality.
It is an honor to co-chair my first Partnership for Growth meeting. The United States remains committed to our development partnership with Ghana through this initiative. I look forward to hearing more from our Technical Teams this morning on how our bilateral efforts are progressing.