The energy sector in Ghana is expected to face significant inefficiencies in the next three years, with the government projected to spend approximately GHS 92bn to cover them.
This was disclosed by the Executive Director of the Africa Centre for Energy Policy (ACEP), Benjamin Boakye, who cited a surge in energy transmission losses as the root cause of the issue. The losses, he said, have reached 30%, which has necessitated the government’s provision of funds to cover the costs.
Mr Boakye, who was a panelist on NorvanReports’ Twitter Space Conversation themed “The Current Economic Crisis: Is there Any Silver Lining; What is Ghana Missing?”, expressed concern about the need to curb the energy sector’s inefficiencies immediately. He cautioned that if the government does not act fast to address the problem, it will continue to spend heavily on the sector’s inefficiencies.
The news of the projected expenditure by the government comes at a time when the country is already grappling with numerous economic challenges. According to recent reports, Ghana’s fiscal deficit has increased significantly due to the impact of the Covid-19 pandemic and the Russia-Ukraine war on the country’s economy. The situation has resulted in rising debt levels and increased pressure on the government to find ways to finance its spending.
It is not clear how the government plans to tackle the inefficiencies in the energy sector, but experts have called for the adoption of a comprehensive strategy that will address the root causes of the issue. The government has already taken some steps to address the sector’s challenges, including the implementation of a new tariff regime that seeks to address the financial viability of power distribution companies.
However, much more needs to be done to address the sector’s inefficiencies comprehensively. This includes the need for greater investment in the sector to improve infrastructure and the deployment of new technologies that will enhance efficiency. Additionally, there is a need for the adoption of policies that will promote transparency and accountability in the sector.
It remains to be seen how the government will respond to the challenges facing the energy sector. Still, there is no doubt that there is an urgent need for action to address the sector’s inefficiencies and ensure the country’s energy needs are met efficiently and sustainably