Energy Crisis: We are not paying realistic tariffs – Financial analyst

Financial analyst, Yaw Appiah-Lartey, has highlighted critical issues facing Ghana’s energy sector, emphasizing that the challenges are not unique to the country but are prevalent across Sub-Saharan Africa.

Speaking on Morning Starr with Lily Mohammed, Mr. Appiah- Lartey outlined that the fundamental problem in the sector is the failure to pay realistic tariffs for the energy consumed.

According to him, Ghana’s energy sector is facing structural issues that hinder growth and sustainability.

He pointed out that while privatization could be a potential solution, it would not yield the desired results unless the government adjusts its approach to tariffs.

The financial analyst called for a more dynamic tariff system similar to the one implemented in the fuel sector, where prices automatically reflect fluctuations in global fuel prices.

He further suggested that Ghana could explore a partial privatization model, where the private sector and the government collaborate through a concession arrangement. This would allow both parties to bring in investment, with the benefits shared between them.

Mr. Appiah-Lartey also praised the energy policies outlined by the Minister of Energy nominee, calling them “laudable” and emphasizing that their successful implementation would lead to long-term advantages for the sector.

“The energy sector challenge is a fundamental thing not only in Ghana but across Sub-Saharan Africa. The main issue is that we are not paying realistic tariffs for the energy that we are consuming. If we are not being realistic about tariffs, privatization may not achieve its intended purpose.”

“Today, if fuel prices increase in the world market, you go to the pump, and the price has automatically adjusted. That is a deregulated market. I agree we should do the same in the power sector where we do not have a situation where tariffs are suppressed even though we should be increasing the tariff. These policies that I have heard the minister outline are laudable, and if we are going to implement them, we will have the benefits in the long term.”

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