The Ghanaian government recently hiked the tariffs in a bid to attract foreign or private investors into the energy sector in the country. The rates went up by 59.2% making electricity a more expensive commodity than rent. It costs approximately $1131.19 to rent a one bedroom apartment in the city center, Accra. With those tariffs in play, a person staying in such an apartment and consuming 100kWh of power might have to part with up to $1620. New Patriotic Party (NPP) frontman Nana Addo Dankwa Akufo-Addo slammed President Mahama’s administration for this, charging, “the cost of electricity is more than the cost of their rent…because you can’t afford to pay.”
- Individual consumers.
These include private people most of whom are poor and live below the poverty line. To those with limited income power prices are highly critical hence the decision by the government to hike the prices directly impacts them. This has pushed some people to consider energy theft.
Non-residential energy consumers in Ghana refers to small business enterprises, banks and various commercial enterprises. High tariffs have cut deep into their profits resulting in the closure of many. Those that remain continue to operate under reduced profits.
- Major industries
Electricity is of utmost importance in the running of industries. These include mining, lumbering food processing cocoa, and others. Hiked tariffs have inflated production costs which has led to sky-high final product prices.
- Closure of some distribution channels of energy giant WAPcO in order to conduct major repairs on damaged gas pipelines had a direct impact on the energy generation. This is because WAPcO supplied cheap gas for thermal power generating plants. These plants account for 30% of the total power generated in Ghana. Volta river authority is a thermal generating company that depended on natural gas for power generation. Closure of WAPcO resulted in turning to light crude oil which was an expensive venture.
- Encourage foreign investors
By waiving taxes on investors interested in coming up with electricity production plants. The government can also provide incentives to attract investors.
- Come up with more sustainable energy sources
These include renewable energy sources such as the wind and solar power. This would add more power to national grid. It would also come a long way in reducing the over reliance on the natural gas and the Akosombo dam whose production fluctuates yearly.
- Reducing energy loss
Reducing power losses during production transmission and distribution is a long-term solution to the energy crisis. Technical losses due to electrical pilferage by the poor people who can’t afford the pricey commodity should also be curbed.
The government through the utility corporation (ECG) has resorted to power rationing to satisfy the ever-growing energy demand. This is a short term solution which has been met with fierce criticism by multiple stakeholders.
Hiking electricity prices
The state hiked electricity prices to attract investors. The pricey commodity has made the energy production sector seem like a lucrative opportunity for them.
The government has also turned to soliciting funds from donors and international financing institutions to finance the energy sector and come up with other electricity generation solutions.