Date: March 11, 2013, 10:03 am


GHANA IS IN CRISIS – GOVERNMENT MUST SIT UP


The Integrated Social Development Centre (ISODEC) finds it extremely unacceptable for Volta River Authority (VRA) to foist payment of government debts onto the ordinary Ghanaian.


Since the collapse of the nation into the recent “utility crisis” as described by the President of Ghana, and government’s helplessness to provide lasting solutions to them, Ghanaians have began showing signs of despair as they take stock of the toll of the situation on their livelihoods. The economic cost of these blackouts and disruptions run into several hundreds of millions of cedis annually. Recently the Association of Ghana Industries ranked disruption in energy supply as number one of the thirteen major problems facing its members.

 

Can we assume that Ghanaians are right to lose their patience in this kind of bleak situation?  It is unquestionable, that due to the “dumso dumso” many have suffered severe property loss.  People still have to grapple with the hike in fuel prices and the long queues in search of gas for their food and transportation.  VRA can therefore not expect Ghanaians to pay for an increase in tariffs when they are not provided with the services they are paying for?

 

From all indication, the current energy crisis is government-inflicted.  VALCO and other bodies owe VRA GH¢1,086,423,500, being non-payment for bulk sales of electricity to them. Of the said amount, MDAs are indebted to the tune of GH¢230million; Electricity Company of Ghana (ECG) GH¢270 million; VALCO GH¢77million; while government owes the Authority GH¢509million.[i] This information was made available in January.  Only two days ago, the Director of Customer Service, Dr. Nicholas Smart-Yeboah of the Electricity Company of Ghana told Ghanaians that Government owes the Electricity Company of Ghana (ECG) close to US$500 million in bills.   As of yesterday, “Citifmonline.com exclusively reported that VRA was in deep financial crisis and is suggesting an increase in tariff to help electricity providers in the country to meet the current power challenge.

 

The issues at stake are not only about procuring crude oil and gas for effective generation of energy to end users.  The recent nationwide blackouts and load shedding signal the deep problems existing in the energy sector. Energy generation has not kept up with demand. While demand in the country is growing by 10 to 15 percent annually, supply is well below demand. Experts believe that Ghana needs about 5000 megawatts of energy to keep up with soaring demand and to achieve full middle income status. Unfortunately energy generation capacity in the country is about 2200 megawatts.[ii]

A number of factors including neglect, poor management and underinvestment in infrastructure have led to supply falling behind demand, thereby creating the huge supply deficit. The deficit has in turn created huge pressure on existing infrastructures. Interestingly enough most of the critical infrastructures used by VRA, GRIDCo and ECG are obsolete and need replacement. But the inability of the companies to replace them due to their weak financial position has resulted in huge load pressure causing system failures.


Though government intends to increase generation capacity to 5000 megawatts by 2015 it is unlikely that the target would be met given financial challenges facing VRA. According to Dr. Imoro Braimah of Department of Planning-KNUST, without increased investments in the power sector, total electricity generation capacity will be only about 2,665 MW by 2015, leaving a deficit of about 46.7%.

 

Ghana is truly in a state of severe crisis.  The Head of Public Relations at the VRA, Sam Fletcher, believes that if there is a tariff increment, “VRA will do very very well”.  That is what has been told Ghanaians over and over whenever the Authority decided there should be “upwards adjustment” of tariffs in electricity.  We strongly urge the PURC, given the prevailing circumstances to again facilitate an engagement between citizens and VRA and the regulator for an account of the management of our resources and for effective solutions to the crisis.

 

We again call on government to take urgent steps to solve “dumso dumso” with more precision than it has done so far.   Yes! Ghanaians have a responsibility, as noted by the president in his 6th March address, to properly manage our utilities; however, the responsibility of enforcing the laws on the use of utilities, the rehabilitation of critical infrastructure and the provision of the much needed finances squarely lies at the doorstep of government, the utility companies and the regulator. Without much delay, VRA, GRIDCo and ECG should be reformed and restructured to improve upon efficiency in their operations.

 

Governance is about service to the people. It is about providing lasting solutions for sustainable national development superintended by a national development vision. 



[i] http://business.myjoyonline.com/pages/news/201301/100583.php

[ii] http://opinion.myjoyonline.com/pages/feature/201205/86904.php

 

 



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