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Ghana to reduce electricity costs, Wednesday



Reduction of high tariffs was part of campaign promise

By Nsikan Ikpe


The Government of Ghana is set to reduce electricity costs all over the country, The Difference has learnt.

News of the reduction was communicated by President Nana Addo Dankwa Akufo Addo, who stated that details of the electricity tariffs reduction would be announced by Finance Minister, Ken Ofori-Atta at the 2018 budget reading scheduled to take place in Parliament on Wednesday, November 15.

The high electricity tariffs reduction was part of the promises made by the ruling New Patriotic Party (NPP) in the build-up to the 2016 elections, with the party pointedly affirming that a situation where electricity cost more than house rents was not acceptable.

Akufo-Addo made the disclosure of the forthcoming downward tariffs review which is expected to comre into effect from January 1, while addressing guests at the Association of Ghanaian Industries Awards (AGI) dinner held on Saturday night.

He also used the occasion to applaud the improvements that have since been recorded in the electricity supply situation in the country since the coming into being of his administration, remarking that his team had indeed done a whole lot to ensure reliable power supply to Ghanaian citizens and businesses.

“I’m glad that businesses are no longer burdened by the erratic power supply that wracked our nation in recent years. Dumsor, thank God, appears now to be the thing of an un-lamented past. Another of the stars of the government, the Energy Minister, Boakye Agyarko, is to be commended for the sterling work he’s been doing so far on this matter,” the President said.

“Furthermore, the government is moving to set in motion the process for the review of electricity tariffs and in the budget to be read by the brilliant Minister of Finance, Ken Ofori-Atta on Wednesday, I’m sure we will hear some good news in this regard.”

It will be recalled that Energy Minister, Boakye Agyarko, had hinted of plans to review taxes on electricity to further alleviate the economic burden on Ghanaians back in September.

“On the budget, it is our faithful expectation that we should be able to reduce tariffs. We are getting a lot of corporation in so doing. So we believe that through this budget to the end of the year, we should be able to start bringing the prices down,” Agyarko had said at the time.

Principally, Agyarko had explained that, the government plan was hinged on working to stabilize the price by reducing waste in the power generation and distribution systems.

“When we set out, the commitment was that we need to correct two things. One was stabilizing power, so that we get the product that we are paying for. I believe that we have largely succeeded in stabilizing the supply of power”.

On its part however, the opposition has expressed doubt  over the feasibility of the plan stating that the administration may have put too much store on an expectation of gas coming on stream to power thermal plants as a means of driving down electricity costs.

“The fuel consumption in Ivory Coast is gas, so all other things being equal, the tariff will be low. In Ghana we are using gas as far as light crude oil, sometimes heavy fuel oil and at times diesel. So it is a matter of principle he should have stated first. He should have stated that henceforth, from this day, we are no more going to use other fuel, we are going to use the principle of Ivory Coast where the thermal plants are being powered by gas which is less expensive and therefore they have low tariff,”  remarked the Minority Spokesperson on Mines and Energy, Adams Mutawakilu.

But other policy watchers think that the plan could work with the right political will, noting that it may very well be part of why President Akufo-Addo has been engaged in elaborate shuffle diplomacy across the sub-region in the past few months. They also point to recent impressive growth statistics, as for example, where the economy reportedly grew by 9 per cent in the second quarter of 2017.

Epileptic power supply and high tariffs have been strong disincentives for optimising manufacturing and growth in the West African sub-region for decades now, leading to inordinately high import bills and negative balance of payment outcomes.


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