Business News of 2014-05-22

Comment: Power outages killing businesses

Indications are that the country is far away from the planned load-shedding exercise, otherwise known as “dumsor, dumsor”.

Presently, all parts of the country served by the national grid experience the planned load-shedding, the consequence of a shortfall in power supply, according to the power producers.

The government has in place an elaborate programme to narrow the gap in the energy supply chain in the country.

The hardest hit by the planned load-shedding are the operators of small-scale businesses such as hairdressers, artisans of all kinds, drinking and ‘chop’ bar operators, convenience and barber’s shops. When the lights go off, these operators have no choice but to close their shops, as they do not have the ‘muscle’ to purchase generators to serve as redundant power stock which can be used during the power outages.

Big businesses that cannot halt their operations are forced to purchase generators to run their production lines, but the extra cost of production is always passed on to consumers.

The recent decision to introduce automatic tariff adjustments on a quarterly basis was meant to remove the subsidy regime in order to attract other power producers. Ironically, these efforts to recover the cost of production of power are not helping to make the energy producers very efficient.

Quite a sizeable percentage of power that is produced goes to waste through illegal connections and the use of obsolete equipment and technology.

Thus, the consumer is still overburdened with high tariffs and poor services, while the Public Utilities Regulatory Commission (PURC) looks on helplessly, unable to apply the sanctions to get the power companies to deliver to the expectation of consumers.

The poor generation of power, leading to the planned power outages, is one of the low points of the government’s service delivery to the people and the earlier this problem is fixed, the better it will enhance the government’s move to fulfil its contract with the people.

We have been looking up to the US government to fulfil its promise to assist Ghana with a second Millennium Challenge Corporation (MCC) compact to support the power sector.

The US Ambassador to Ghana, Mr Gene A. Cretz, yesterday said the US government was preparing a $500-million grant to support Ghana’s power sector through the second MCC compact.

Speaking at the signing ceremony of two memoranda of understanding (MoUs) to strengthen the energy sector, he said the second compact would improve power reliability and service delivery, as well as help ensure continued and cost-effective power supply.

Ghanaians can no longer wait for this compact to rescue them from the debilitating ‘dumsor dumsor’ that has slowed down domestic and commercial activities in the country.

We expect the second compact to help update our power sector and restore it to the glorious days of the 1970s when Ghana was a net exporter of power to its neighbours.