wpid-ghana-cedi.jpgMaking the power and petroleum sectors rise to the Challenge.

The world Bank office launch a flagship energy sector report which highlights some of the daunting challenges facing Ghana?s power and petroleum subsectors, and which threaten to undermine Ghana?s bid to become a fully fledged middle income country.

Prepared by a team of world bank staff and local experts, during a period of electricity shortages and rolling power blackouts, the reports highlights the potential economy damage this trend is inflict on the country, at a point when Ghana?s fast growing economy has evolved to become even more dependent on reliably electricity and fuel supply. The report outline the opportunity and challenges from managing Ghana?s finite oil and gas resources as well as the opportunity cost of mismanaging Ghana?s electricity untilities,and identifies three themes that are common to Ghana?s power and petroleum sectors.

First, Government policies and decisions have delay investment in gas supply and power generation, which are at root of the current power shortages. While the blackouts are partly due to the unexpected interruption of imported gas supplies, a deeper look reveals a broader problem of a power sector without a cushion to absorb external shocks. For instance, avoidable delays in the productions of jubilee gas have left Ghana?s gas ?base power plants needlessly idle or burning very expensive oil. The three year delay in commercialing jubilee gas has cost Ghana a billion dollars in extra crude oil used for power generation.

Also, Ghana has not been able to attract substantial private investment in power generation because of the flow creditworthiness of its utilities. Private investment has been inadequate and some projects such as the Sunon Asogli gas only plant are idle due lack of gas.

Second, several state owned energy enterprises and oversight entities are underperforming. There is an absence of accountability and proper oversight and a lack of sanctions for nonperforming in delivery of energy supply.

Third, the current pricing/tariff and subsidy policies for energy are not financially sustainable. Energy providers do not collect adequate revenues from users and struggle with inadequate state subsidies. As a result, they find it difficult to maintain and expand their infrastructure, while at the same the burden of these subsidies weighs heavily on the nation?s budget.

While solutions to these problems are known; the challenges is to carry them out. Proactive leadership of the energy sector, both at the political and the bureaucratic levels, with a focus on efficiency and timely delivery, are crucial to Ghana?s ambitions for economic growth and desire to be become a major power exporter in Ecowas Sub region.

“Our Concern, Yusupha Crookes, World bank Country Director for Ghana is the ordinary Ghanaians self ?employed dress maker or barber, who is now struggling to keep the business going; about hospital operating theaters that experience “light offs“ in middle of surgery; about industries that are obliged to spend huge sums to run their own generators on diesel in order to keep their production going“.

A number of recommendation are made in the Report, among them the need to review existing structures tom eliminate dysfunctionality.;improve planning to execute new generations on a continuous basis to take care of the growing demand; restructure key sector utilities in both power and petroleum subsectors for better accountability, efficiency and effectiveness and devise a strategy to bottleneck and simplify processes and spend up decisions in order to boost private sector investment in power generations.

Sunil Mathrani, Task Team Leader for the Report States, ?the time has come to rally all stakeholders in Ghana?s energy together to find lasting solutions to these challenges. We have to act now to avoid more “dum sor dum sor“ (incessant power cuts in future.

By :Joshua SOWU

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