Not too long ago, Ghana was heralded as an economic success story.
But the financial base of this West African nation has been rocked by an ongoing energy crisis, resulting in job losses and mass protests.
Authorities blame low water levels at the Akosombo Hydroelectric Dam – which is the main supplier of electricity for Ghana – and a lack of gas to power the country’s thermal plants as the main cause of the crisis, which began in 2006 but has escalated over the last two years.
However, commentators also point to old and out-of-date machinery at the country’s three power plants and a demand for electricity that outstrips the supply for the power outages which are known locally as dumsor.
In February, a power rationing timetable was introduced by the Electricity Company of Ghana (ECG); now 24-hour blackouts are followed by 12 hours of electricity supply.
The Association of Ghana Industries (AGI) has pleaded with the ECG for major industrial hubs like Tema and Accra North to be exempted from the load shedding timetable, but the country’s main electricity distributor says the power available cannot meet the demands of industry.
AGI, whose members are largely into manufacturing, has also complained bitterly about the energy crisis after seeing production slump in the last quarter.
Major employers like Coca-Cola, Cadbury Ghana and construction supply company Mantrac have even started laying-off workers.
According to James Asare-Adjei, president of AGI: “The situation is dire and officials of the Electricity Company of Ghana, Volta River Authority (VRA) and Ghana Grid Company (GRIDCO) must manage it, so we don’t kill businesses.”
Threat of more layoffs
But the threat of more layoffs hangs over the heads of Ghanaian workers.
According to Solomon Kotei, General Secretary for the Industrial and Commercial Workers Union (ICU), “more than 60 companies are expected to close down for a while and some companies will do a complete shut down.”
The ICU has also hinted that “more than 2,000 workers are on verge of losing their jobs by the end of June 2015, unless there is improvement in the business sector”.
Small and medium sized enterprises (SMEs) are not exempted from the scourge of the energy crisis, either.
Most businesses, especially the service sector, have resorted to the use of expensive, noisy and environmentally unfriendly diesel generators to keep their businesses running.
As a result, businesses have no choice but to pass on the high cost of this additional expense to consumers.
Roberta Torkornoo, the human resources manager of Coconut Grove Hotel in Cape Coast, tells Equal Times: “The crisis is impacting heavily on the operations of the hotel to the extent that the hotel has to buy diesel at the cost of 2500 cedis (US$ 658) every other day to keep the hotel running.”
Angela Owusua is a wholesale dealer of frozen fish and poultry in Accra. “After spending all my money to buy fuel to power the refrigeration units, I am not sure how I am going to pay salaries at the end of the month. At times, I consider shutting the business down for a while to prevent the pilling up of debt,” she says.
Confronting the crisis
Late last year, a new ministry called the Ministry of Power was carved out from the Ministry of Energy and Petroleum.
President John Dramani Mahama, in his February State of the Nation address to the Ghanaian Parliament, outlined the measures that his government would undertake to shore up the power sector through the importation of power barges from the United Arab Emirates, Turkey and the United States.
“Following power purchase agreements that we have entered into with several independent power producers, we expect to inject 3,665 megawatts of power into our national grid,” President Maham asserted.
Ghana’s total installed generation capacity is about 2900 megawatts but it is currently running at 1200 megawatts.
The Minister for Power, Dr. Kwabena Donkor, has publicly stated that he will resign if he is unable to solve the power crisis by the end of the year.
The government has also targeted a long term solution to the crisis, which the administration wants to implement before the general elections in December 2016.
Part of the plan is to attract investment in the state-owned power distribution company by opening up electricity generation to the private sector, either through partial privatisation or through concession contracts.
However, the leadership of the Trades Union Congress (TUC) and Ghana Employers Association (GEA) disagree with the timetable and have called on the government to implement short term measures to minimise the power outages.
Kofi Asamoah, General Secretary of the Ghana Trades Union Congress, said in a statement: “The government must prioritise the energy sector and work assiduously to solve the crisis since the impacts of the crisis are a threat to national security.”