Efficient electricity access will promote industrialisation

A World Bank economist, Albert Zeufack, believes access to electricity will lift productivity within and across sectors in Africa. To this end, Zeufack says African governments must fully embrace technology and leverage innovation to ensure quality, affordable and sustainable electricity.

There are huge disparities in electricity access between rural and urban households, and that is not in contention. The World Bank’s bi-annual analysis publication called Africa’s Pulse reports that urban households have about 71% access compared to around 22% among rural households.

To bridge this access divide, the Bank notes that there are substantial cost reductions from rapid technological improvements in home-scale solar power, which offers opportunities to improve the lives of people without access to electricity in rural Africa.

Apart from low access, issues such as low consumption, low reliability, high per kilowatt cost and utilities running at a loss are other problems that confront electricity access across the continent. The report further states that leveraging the private sector will be critical to scaling-up electrification.

Ghana is at the forefront of privatising electricity distribution in the country, with the Millennium Development Authority playing a facilitating role. We are being told that the Meralco consortium has been determined to have the highest combined technical and financial score and is therefore the preferred Bidder.

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The consortium is led by Manila Electricity Company (Meralco) which is a 115-year-old privately-owned company incorporated in the Phillipines. Meralco is the largest electric distribution company in the Philippines, covering 36 cities and 75 municipalities including Manila.

Meralco’s international experience includes Nigeria, Ethiopia, Tanzania and Indonesia where it operates as a technical partner. Meralco is one of largest electricity distribution companies in the world, with 6.3 million customers. With such a remarkable pedigree, it is little wonder that Meralco is the preferred bidder.

Ghanaians have long expressed frustration with the Electricity Company of Ghana (ECG), which has served the country since independence and is a state-owned entity. Unreliable power generation, the utility running at a loss among others – such as the high rate of illegal connections and lack of payment from state-owned enterprises – have negatively affected the fortunes of ECG.

What compounded the situation even more was the reliance of hydro to power the nation; with the onslaught of climate change and its attendant unreliable rainfall patterns, the dam experienced extremely low levels of water incapable of generating electricity – which led Ghanaians in the main to insist on private participation to improve efficiency in electricity generation.

We are pleased that the long process has come to a finality, and soon Meralco will manage ECG. It is the hope that electricity generation will be greatly enhanced and Ghanaian consumers of electricity will derive value for money.

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While at it, we should also consider how electricity will be extended to all districts and remote areas to give true meaning to the industrialisation programme of ‘One-District, One Factory’. It is important for higher productivity across sectors.

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