THE World Bank Group has warned of dire consequences for Ghana’s economy if the country’s energy sector challenges are not dealt with speedily.
Pledging the Bank’s support for Ghana, visiting Managing Director (MD) of Operations of the World Bank, Madam Anna Bjerde said “Ghana needs an emergency energy action plan to avert a total shut down, with dire implications for the economy.”
Speaking at a press briefing held Friday in Accra to throw light on her four-day working visit to Ghana, madam Bjerde who disclosed that she had spent a lot of her career working in the energy sector said the energy sector challenges Ghana was facing were not unique to the country, “but they are very serious, because if they are not addressed they will continue to get worse.”
She stressed that part of her discussions with government was over the challenges in the energy sector.
“There has been deterioration in the performance of the energy sector over the past few years (in Ghana), particularly in the financial performance, and we are trying to help to prevent interruptions in energy supply,” Bjerde said.
According to her, the most pressing issue in Ghana’s energy sector was cost recovery due to weak revenue mobilization, adding that the World Bank support would help improve metering, billing, and revenue collection to pay for power generation.
“Prompt action is needed. It would cost the state more to keep the energy sector running when they need to spend money on other things if the level of financial losses is left unattended to,” madam Bjerde warned.
“Economic growth will be impacted, not to mention the impact on the population whether in schools, hospitals. The energy sector needs an emergency action plan to correct the situation, which the government is working on, and we are supporting it.”
The World Bank MD’s observations are not different from earlier observations made by energy experts, Civil Society Organisations and think tanks such as the Africa Centre for Energy Policy (ACEP).
Under-recoveries in Ghana’s power sector undoubtedly undermine the growth of the economy and its development process.
The sector’s State Owned Enterprises (SOEs) recorded losses of GH¢3.7billion in 2018, GH¢2.9billion in 2019 and GH¢2.5billion in 2020 totalling GH¢9.1billion in the three years.
Ghana, between 2013 and 2015, suffered a crippling power crisis prompting the then government to invest heavily in expanding power generation.
Most of the investment, however, was in partnership with independent power producers (IPPs), which means the country must ensure regular revenue flow from consumers to pay the IPPs.
The country currently owes the IPPs about $1.7 billion, with constant threats of shutting down.