Myjoyonline.com is quoting the President-elect, John Dramani Mahama, as having expressed concerns over the health of Ghana’s economy, stating that despite President Akufo-Addo’s optimistic outlook on third-quarter growth, the economy remains “very sick.”
Speaking during a courtesy visit by the Ghana Pentecostal and Charismatic Council, John Mahama, according to the report, stressed the critical need for reforms in the energy sector, which he believes could derail the progress made under the debt exchange programme and the International Monetary Fund (IMF) agreement, if left unaddressed.
Mr Mahama highlighted inefficiencies within the Electricity Company of Ghana (ECG) and pointed to unsustainable commercial and technical losses of over 32%. “The energy sector can derail everything that we have done with regard to the debt exchange and with regard to the IMF programme, because the debts continue to pile up there.
“The ECG governance is in a very bad way, and so they are making commercial and technical losses of more than 32%. There is no utility company that can survive with 32% commercial and technical losses and still continue to be a viable utility, and so as quickly as possible we need to do reforms, in the whole electricity value chain,” the news outlet quoted the President-elect as saying.
First of all, The Chronicle is happy that even before he assumes office as president of Ghana, Mr Mahama has identified the problem that is thwarting the smooth operations at the ECG. It is equally refreshing that he has promised to deal with the situation by introducing reforms.
The Chronicle will be observing with eagle eyes whether this promise will be fulfilled or not. As we put this editorial together, intermittent power supply is still being experienced in all parts of the country. The development is being attributed to the ECG’s inability to pay Independent Power Producers (IPPs), to who it owes millions of United States of American Dollars.
The Chronicle does not think the ECG itself is happy that it owes these IPPs. The bottom line, however, is that what they collect from their customers in the form of revenue is not sufficient enough to pay those who supply them with the power. Several factors are being attributed to this development, which include failure of companies to pay for the power they have consumed due to the low revenue they are also deriving from their operations.
Another leg of this problem, which has been with us for several years, is the power theft. Some consumers appear to have adopted cruel ways of using power without paying for it. There are allegations that some of the ECG workers sometimes assist these consumers to steal the power. To tackle these problems head on, Mr Mahama and his government must first address the issue of poor revenues being generated by companies who are using power for their operations.
In our view, these companies are not performing well due to the current economic situation, which can also be attributed to several factors including the popular Russia-Ukraine war and the Cedi-Dollar exchange volatilities. Mahama’s administration must do everything possible to ensure that the cedi-dollar conundrum has been stabilised for businesses to properly plan for the year.
With regards to the power theft, we believe a lot of education has to be done for people to appreciate the need to legitimately buy the power from the ECG. But all said and done, we are waiting for John Mahama’s reform policies for the sector, as he has promised. He criticised government whilst in opposition and this is the time for him to prove that he was not just criticising for the sake of criticism, but that he has what it takes to solve the problem.
