Power outages: SMEs, households suffer losses - IEA survey

A survey by the Institute of Economic Affairs (IEA) in 2024 revealed that persistent power outages (dumsor) has had a considerably detrimental impact on both commercial and domestic consumers of electricity.

According to the survey, around 70.7 percent of businesses and 61.5 percent of households said that power outages had significant or severe effects on their business activities.

Head of Survey at the IEA, Samuel Manu, revealed that the phenomenon’s effect on businesses is more severe when compared to that of households. He added that about 64.5 percent of respondents indicated the effect of power outages in the year 2024 included damage to their electrical appliances and/or financial losses to their business or both.

“The power outages, also known as ‘dumsor’, have brought untold hardship to most people in the Greater Accra Region – with most consumers suffering losses in damaged goods. The cost of dumsor in Ghana goes beyond a simple decline in GDP; it includes the suffering of individuals and small businesses in the form of appliance damages and financial losses,” Menu said while presenting the report to media in Accra.

He stated that the survey aims to find out the experiences of domestic businesses and households, days after the president’s declaration that dumsor was over. It additionally enquires about frequency of the outages, their duration, effects on businesses’ and household equipment and consumer expectations about future supply of power.

The findings also feed into the search for a lasting solution to power outages in the context of a stakeholder forum that IEA intends to organise in coming weeks.

With respect to the issue of how often businesses and households experienced power outages, the results showed that almost 94 percent of respondents experienced various degrees of power outages ranging from once to more than seven times per week.

Overall, 75.4 percent of respondents experienced power outages at least 3 times in the week, with about 19 percent recording 7 or more episodes of power outage. The calculated average outage per week is approximately 4 times. These figures show significant power interruptions across the Greater Accra Region even after the president declared dumsor was over.

“An average of four power outages in a week which last for 4 to7 hours cannot be attributed to mere faulty transformers, as claimed by utility providers. It definitely has element of low electricity production and supply. Therefore, we conclude that ‘Dumor’ persisted even after the president made a bold declaration that it was over and will never return,” he stressed.

Recommendations

Mr. Manu urged government to work with all major players in the power sector to provide a permanent and sustainable solution to the country’s reoccurring power crisis, as it has dire consequences for small and medium scale businesses and poor households.

“A permanent solution may transcend government; therefore, we expect all political parties to produce a roadmap for a lasting solution to Ghana’s energy problems in their manifestos,” he added.

He further appealed for the Electricity Company of Ghana (ECG) to provide information in advance of power outages, the reason for a power outage and when to expect restoration of power at the local level to help businesses and households plan their daily activities efficiently.

“Government and parliament should consider policies to make alternative power sources affordable and available to the people of Ghana. These include tax reductions on renewable energy such as solar panels and solar-powered portable lights,” he concluded.