Finance Minister, Seth Tepker has said the recurrent power crisis facing the country can partly be blamed for the continuous depreciation of the cedi.
He pointed out that after the breakdown of the West African gas pipeline which was supposed to channel gas from Nigeria to other West African countries including Ghana, government subsequently resorted to heavy imports of lite crude oil.
He said the situation had adverse effect on the cedi.
The West African Gas Pipeline had suffered two setbacks, one in 2007 and the other in 2012.
In 2012, an unidentified ship reportedly damaged the pipeline hence delaying the commissioning of the project.
Speaking at a stakeholder’s forum on the sidelines of the International Monetary Fund (IMF) programme, Seth Tekper explained that “for two and a half years, the West African gas pipeline was breached by a pirate ship, and we came to a point where the President says he will not make any more promises because the information he got from the authorities of the West African gas pipeline was always shifting.”
“So this was one significant problem which led to part of the forex crisis that we had because we had to use more reserves to import lite crude instead of using gas and that also put pressure on the cedi at the time gold and cocoa prices were falling. So the power disruptions have the origin in the two and half years, though that [Gas pipeline] has been restored, we know that the supply is sometimes sporadic,” he added.
“There are other issues but we just want to highlight this,” he added.
Source: Citi Fm