‘Dumsor’ is key structural barrier to growth – World Bank

Electricity shortages emerged as “key structural impediments to growth” in several African countries in 2015, including Ghana, the World Bank has said in its twice-yearly analysis of economic trends on the continent titled ‘Africa’s Pulse’.

Among other factors, the bank said the situation has meant growth in sub-Saharan Africa will slow in 2015 to 3.7% from 4.6% in 2014, which is the lowest growth rate since 2009.

The Bank mentioned Ghana, Nigeria, South Africa, Botswana, Namibia, Zambia and Senegal as having been severely affected by lingering electricity shortages.

“Despite rising demand, electricity supply has remained broadly constant and power cuts are pervasive,” the Africa’s Pulse report indicated.

Discussing the report with journalists from across the continent via teleconferencing, officials of the bank said although sub-Saharan Africa will be “repeatedly tested” by new shocks in the global economic environment, they see growth rebounding to 4.4% in 2016 and 4.8% in 2017.

In Ghana, the Bank said “rising oil production, diminishing imbalances and easing of the electric power crisis are expected to lift growth in 2016-17”.

The Bank, which is currently rolling out a bailout programme for Ghana, warned in a 2013 report that “misguided and inappropriate policies” were leading to the power sector becoming a drag on the Ghanaian economy.

The report is titled ‘Energising Economic Growth in Ghana: Making the Power and Petroleum Sectors rise to the challenge’, and indicates that without actions to attract additional generation, the country will be short of about 1,600 megawatts by 2022 -- since current investment plans from the Volta River Authority (VRA) and independent power producers (IPPs) are projected to add only about 740MW.

“Ghana needs to invest over US$4billion in the next 10 years to make up for the past investment deficit and upgrade its power sector infrastructure. Generation, transmission, and distribution all need substantial upgrading, and the necessary investments must take place in a synchronised manner,” the report said.

In the 2013 report the bank was also critical of the kind of leadership Ghana’s power sector has received, recommending that government should, within six months, set a “professional eligibility criteria” for the selection of membership for the boards of energy sector state-owned enterprises.