In Washington, the Millennium Challenge Corporation, MCC, recently launched its energy-focused investment outlooks for three African countries: Ghana, Malawi and Tanzania.
The event also highlighted general investment opportunities and the economic climate of the countries in Africa, particularly in the energy sector. Most African countries, including Ghana, do not have enough electricity for long term and sustainable growth.
However, this major challenge is getting a huge boost from government and private investments facilitated by the MCC.
One boon will be the MCC’s Ghana Power Compact, a five year partnership with the U-S. It will provide Accra with the power and resources needed to reduce poverty and provide enough power for sustainable economic growth.
Under the agreement the MCC said it will invest up to $498 million over the next five years to support the country’s commitment to transform its power sector. In turn, Ghana is committing $37.4 million of its own money. Additionally, Accra is expected to receive $4.6 billion from American and private investment firms in the coming years.
Seth Terkper, Ghana’s Minister of Finance and Economic Planning, was one of the participants in the panel discussion on energy in Washington. He said the partnership is what is needed to take Ghana to the next level as an economic player on the international front.
The MCC said the compact is a holistic approach to Ghana’s energy challenges that will encompass distribution, generation and access to energy and will support Ghana’s effort to reduce climate change.
The investments in energy will help Ghana to have an increase in power supply and make more energy available for consumers.
MCC officials state the investments will also help to “reduce consumer electricity waste," which they say is "one of the most cost-effective means to bridge the current gap between supply and demand.”
Ghana’s minister said the compact will not only improve his country’s power sector but the service industry as well. But for now he said it would be too soon to consider Ghana as Africa’s powerhouse.
“Going forward we are planning certainly to grow the economy and in the near future we will hopefully become a powerhouse. But we would be complacent in describing ourselves as such at this stage,” he emphasized.
For now Terkper said the biggest potential investors, particularly for the United States, would be power companies such as General Electric, GE.
“To provide a context, Ghana discovered oil and gas, and we have two gas fields coming on stream,” said Terper who added there are now state-led initiatives for pipelines and power processing plants. Those projects are open to private investment.
“We have a number of private investors coming in, independent power producers in particular to harness that gas, and possibly also to do some refining. So energy and gas are really the areas where we are focused. And let me mention as I said earlier on, that the biggest initiative is the Compact, The Millennium Power Corporation-U.S.-- which is leveraging that Compact,” said Terper.
The Finance Minister said there are also investment opportunities in other areas such as transportation, where Ghana’s airline industry is growing.
“Similarly, we are expanding our sports facilities which will provide barging and other opportunities over Volta Lake for the landlocked countries. And alongside this we have an expanding services sector. In fact, the largest sector of the economy is services, contrary to the belief that it’s natural resources,” said Terkper.
In addition, he said that opportunities for women will continue to expand especially in marketplaces where businesses are predominantly owned and operated by women.