Ghana loses $1.4-billion to worsening energy crisis

Ghana’s growing manufacturing, services and informal sectors stand threatened and the economy may well lose N182.88-billion ($1.4-billion) at the end of the year if the country’s current energy crisis is not arrested, a new research has warned.
The country’s manufacturing sector suffered a major setback two months ago when VALCO Aluminium, one of its leading manufacturers, closed operations sending into the labour market its 170 workers.

“More closures are likely if the worsening situation is not treated as a matter of urgency,” said Tony Oteng-Gyasi, president of the Association of Ghana Industries (AGI) at a forum organised by his group where the new findings were made public in Accra, Ghana.

The research conducted by Data Bank, one of Ghana’s leading financial service providers, reveals that four key sectors of the country’s economy incur extra costs of $120-million (N15.4-billion) monthly on energy.

According to Daniel Ogbamey Tetteh, head of research unit of Data Bank, the impact, however, varies from industry to industry depending on the energy requirement needs and cost structure, adding that it would be difficult to make sweeping assumptions on the overall impact on businesses.

As part of measures to address the energy crisis, Joseph Kofi Adda, Ghana’s energy minister, said the government planned to establish a new company, Ghana Grid Company (GRIDCO), to help in the transmission of hydro-electric power, a function that is currently performed by the Volta River Company (VRA). Established in 1961, VRA’s primary function is to generate and supply electricity for industrial, commercial and domestic use in Ghana.

But many observers doubt if the establishment of the new company will make any significant difference to the situation. “It will be just like what happened in Nigeria where the name of NEPA was changed and yet there was no real difference in the power supply situation,” said Kwame Gyasi, an Accra-based IT expert. “It does seem to us that the government has run out of ideas as to how the energy problem should be tackled in the short and long term.”

Businessday