Executive director of the Africa Center for Energy Policy (ACEP), Benjamin Boakye, has expressed the need for government to address issues of under recoveries within the power sector to avert dire consequences on the economy.
According to him, the recent and regular power outages experienced by Ghanaians is as a result of ongoing problems which must be addressed. He revealed that the problems keep “deepening and worsening” and government needs to get to that point where it maps out the problems and solutions.
With this, Mr Boakye insisted that government hasn’t comprehensively mapped out the challenges to be able to address them. Additionally, he explained that even where plans exist, implementation of these plans to ensure that the country is able to deliver power to the people equally poses some challenge.
To this end, he observed that the problems are more “financially managerial” which has escalated into technical problems.
“… It’s a crisis situation to have a power sector that cannot pay 70% of its bills – that is really a difficult challenge. So, government has to always intervene with hard currencies that could have gone into development, but simply because we cannot generate power, sell power and make money, government has to sacrifice a budget to address the under recoveries in the energy sector and we need to address that.”
Benjamin Boakye
Commenting on whether the power cuts are as a result of government’s failure to pay off its indebtedness to WAPCo, Mr Boakye stated that WAPCo doesn’t pose any real danger as it is transmitting at full capacity.
“So, the problem today is not gas. If people are having power challenges, it may not be coming from gas transmission at this point, but the bigger question is how long are we going to be enduring this and how many time do we have to explain to the people that once supplier has withheld supply, therefore we are not able to send power to homes and businesses, and that for me is the bigger challenge for us to deal with.”
Benjamin Boakye
Furthermore, Mr Boakye maintained that the real issue comes back to ensuring that power generated can be sold. He emphasized that government must be able to address these recurrent problems to ensure that power generated can actually be sold and money recovered to pay the value chain.
“At all times, we need companies to do the transmission of gas and all of them would want to shut down or demand that money is paid. So, the problem is not paying WAPCo, therefore, if we know what the problem is, we need to address those problems. What I even fear is the state of the state institutions like GRIDCo and VRA – because they are state entities, they may be suffering and not be able to come up with the real situation that helps all of us to address their challenges…”
Benjamin Boakye
Elaborating on what must be done in the long term to significantly improve power sufficiency in the country, the ACEP executive director urged government to have “ECG fixed as quickly as possible”. He revealed that the state cannot overlook the current problems within the distribution company and say, “it’s business as usual that they cannot collect revenues”.
“Regardless of how much adjustment you do to the tariffs, if the structures to recover revenues are not tight or stringent enough, we are still not going to make money. You can see that even though we have made 100% adjustment to the tariffs, our revenue requirements have actually declined over time which is a signal that we need to fix the management and financial side of things for the sector to function. We don’t need ministers explaining to us what the problem is all the time, when it’s a system that is commercially viable and supposed to generate returns and revenues and pay the value chain…”
Benjamin Boakye
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