Shared metering in compound houses making electricity subsidies purposeless - Study

Shared metres in compound houses are making subsidy benefits to the poor meaningless, a study conducted by the Institute of Statistics, Social, and Economic Research (ISSER) has found.

The study analysed the fiscal interventions and social welfare policies to reduce inequality in Ghana.

The Institute indicated that electricity subsidies, despite the intended objective of supporting poor households, were rather beneficial to rich households.

The Institute attributed the inequality in electricity subsidies to shared compound houses, where electricity is based on shared metering.

Due to the shared metering, although each household’s consumption may be within the lifeline band, ISSER said the aggregated units of consumption recorded on the shared metre could be way above the lifeline bands.

The World Bank (WB) also corroborated ISSER’s stance on Ghana’s electricity subsidies, as it said the design and implementation of the subsidy programme during the COVID-19 pandemic were largely regressive.

“Thus, the programme was more beneficial to wealthier households than to poorer ones,” the WB said.

The situation, according to ISSER, culminated in poor households paying more for electricity and losing out on critical government subsidies.

To address the challenge, the Institute advised the government to revise the tariff structure based on a comprehensive profile of consumers.

ISSER additionally advised the government to make electricity metres available to individual households that lived in shared compound dwellings.

The government, ISSER advised, should increase the pace of the rural electrification exercise to ensure greater access for poor households in rural communities.