Government has assured that it will work to further reduce the cost of electricity in Ghana to help drive its industrialisation agenda in the private sector.
Currently, Ghana has one of the highest per kilowatt cost of electricity to industry in the West African sub-region, even though government has reduced the cost by 11 percent over the past four years.
“We are determined to further reduce the cost of electricity. Energy is the lifeblood of every economy. We cannot talk about economic transformation through industrialisation without anchoring the discussion on cost of energy,” Senior Minister, Yaw Osafo Maafo said on Day Two of the Ghana Economic Forum(GEF) which focused on the energy sector.
He warned that without reliable, adequate and competitive power supply, ‘Resetting the Economy Beyond COVID-19’ will be a mirage.
Outlining what he called the trilogy of energy supply, Mr. Osafo Maafo explained that there is a need to create huge demand for energy by making power available for industry at a cost that will not be expensive compared to other countries in West Africa.
This, he said, can only be achieved if government enters into power deals that will not unnecessarily increase the unit cost of power – “like was witnessed under the previous government”. Referring to the power sector crisis (Dumsor) that hit the country in 2015 and 2016, Mr. Osafo Maafo stated that government is now very careful when signing private power sector agreements which will increase the country’s financial burden.
He explained that the Akufo-Addo government after assuming office had to take pragmatic steps to help reduce the cost of energy by renegotiating energy contracts from ‘Take or Pay’ basis to ‘Take and Pay’.
Connecting the need for reliable power supply to government’s overall growth agenda, Mr. Osafo Maafo said the One District, One Factory initiative is heavily hinged on affordable power supply to attract investors – recalling that one of the benchmarks investors have always assessed before establishing a business in Ghana is the cost of power, which is unfortunately high in Ghana compered to its peers.
Exploring renewable power
The Senior Minister stated that Ghana has the capacity to explore renewable sources of energy to increase its power supply for selling to other countries across the sub-region. He maintained that with Ghana’s geographical position on the globe, developing renewable power for export is a viable option that can be enhanced to attract investors.
“Now, you can’t talk about affordable and reliable power without talking about renewable power. This is an area we can take advantage of to sell power to industry and then outside Ghana,” he said.
Gov’t takes GEF recommendations seriously
Meanwhile, Mr. Osafo Maafo expressed optimism that recommendations which will be presented at the 2020 edition of the Ghana Economic Forum (GEF) will positively influence government’s policies. He assured that a government team will consider the proposals and recommendations which come from the forum to pursue economic growth.
“I would like to thank the organisers of this forum. For the past nine years this platform has presented some good recommendations to governments. Government therefore places premium on the suggestions and recommendations of this forum,” he said.
He called for recognition of need to make energy reliable, affordable and competitive for the business environment in order to facilitate the country’s industrialisation drive.