Improve VRA’s books before going to GSE- Govt told

23 February 2017

Improve VRA’s books before going to GSE- Govt told

Government has been cautioned to first improve on the financial books of the Volta River Authority(VRA) before it is listed on the Ghana Stock Exchange(GSE).

President Akufo-Addo on Tuesday during his maiden State of the Nation Address announced that government may list some state owned power companies on the bourse.

The president further disclosed that the energy sector is indebted to the tune of 2.4 billion U.S dollars. The announcement has sparked some debate among the public.

Speaking to Citi Business News, the Director of Research and Policy at the Institute for Energy and Climate Policy(IECP), Dr. Philip Adom was of the view that government will find it difficult to convince investors to put their money in the VRA if the liabilities far outweigh the assets.

According to him, investors are always watchful of securities they put heir funds into, to guarantee a little returns at least in the short.

He maintained the that the move to list VRA is laudable one, but may face challenges if the financial position of VRA is not improved.

“If you look at it from the broader perspective, yes it is good, good in the sense that once they are listed on the stock exchange people will invest in it. So in terms of the financial position we are likely to see a very improved energy sector but then there is very big ‘but’ the big ‘but’ is that currently the financial status of these utility companies are very bad,” he said.

So one would actually ask, what will move a private person to invest his capital in this industry should they finally be listed on the stock exchange. How do we ensure that we as country we improve on the financial stands of the utility companies. That is where the realistic tariffs come in. Unless government says that for now they have plans to redeem all VRA’s debt. It will be difficult to convince investors,” he added.

He appealed to government to carefully assess the decision and improve the books of the VRA before listing on the bourse.