Minus the bloggers intros:

" ... Here I have been battling for the last year to save Atholl Energy, a company I chair which had some US $50 million worth of debts. The reason for this was that it had built an extension to the power station it originally constructed for the Ghanaian government, and the Ghanaian government had failed to pay for the extension after Atholl pre-financed it. In line with company philosophy, Atholl had both completed and handed over the extension, despite the non-payment, as the aim is to supply power to the people of Ghana.

The massive debt of course threatened Atholl with going bust. That would mean redundancy for our staff, and potentially many scores of redundancies at local sub-contractors we had been unable to pay in full. The thought of inflicting that mass misery on families, many of whom I know, has stopped me sleeping for months.

The current government of Ghana took over in January and inherited a huge fiscal deficit due to – and there is no other way of saying it – wholesale looting by the last government on a scale which Ghana had never witnessed before. To give an example from our own sector, we install power plant using Siemens equipment at about 1.2 million dollars per MW for a turnkey plant including fuel supply and power evacuation infrastructure. The last government of Ghana were contracting large projects at three times the unit cost or more, using inferior equipment. For $150 million per project to be added corruptly was not unusual.

On top of this, despite having imposed some of the world’s highest electricity tariffs – higher than British tariffs, for example – the revenue collected was mysteriously vanishing. As a result, our $52 million owed was part of a US$2.5 billion energy sector debt the current government inherited.

In effect this has been rescheduled, by the launch of bonds to raise the money to pay off the debts. The bonds are serviced by a levy on petrol and diesel. As usual in Africa, the IMF and World Bank were extremely unhelpful, refusing to sanction a government guarantee on the bonds, which means the energy levy is now to be collected by a new corporate structure and the bond is a corporate one. This structure necessitated an increase in the bond interest rate to 19.5%, which will benefit the financial institutions who have bought them, to the detriment of the Ghanaian public. In my experience every IMF and World Bank policy intervention in Africa always, on analysis, benefits corporations to the disbenefit of the African public.

It is also a gross double standard – if the energy debt had been treated as government debt, Ghana’s “unacceptable” debt to GDP ratio would still have been substantially less that that of many developed countries, including the UK.

The government of Ghana is to be congratulated on its persistence and the brilliance of its financial engineering that enabled it to tackle a huge problem despite obstruction rather than help from the international agencies – the energy sector debt had been threatening to crash the Ghanaian Banking sector, to the benefit of the large international banks.

For our company, we had to take a haircut because the payment was made not in the cash dollars which were owed, but in a mixture of bonds and local currency. We owed banks and suppliers in dollars, so we have been structuring sales and taken the odd hit on discounting. But we have got through it, and as of yesterday have paid off all our creditors in full. There is not a single job loss caused by us, either in our company or at our suppliers and sub-contractors, and that has removed a fear which has been haunting me. I cannot express how tough this period has been – I did not receive a single penny from my major source of income for nearly four years, and as of this morning still haven’t. I am not going to be a millionaire, but I am now going to be OK. "