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Opinions of Sunday, 9 March 2014

Columnist: Mensah, Richard Obeng

The keys to Ghana’s energy padlock

I believe in and practice prayers daily. I will rather pray for life-transforming changes in Ghana by invoking positive supernatural interventions in her affairs than to add my voice to some foolish name callings and tags, insinuations and mockery that are of no benefit. “It is better to light a candle,” so goes a saying, “than to curse the darkness.” I concede that although prayer can work out miracles for Ghana, it is never enough if God has not wrought such miracles. Certainly, until God decides to perform a miracle He wants us to discover and apply relevant life principles.
Ghana needs to discover and apply all the relevant principles relating to the energy sector. Energy continues to play pivotal developmental role in nations. It connotes power and power is central to economic growth and development. Energy thus enhances economic growth and development of Ghana. However, Ghana has not been able to enjoy the full blessings within the bosom of its energy sector because of her failure to consistently and firmly apply objective market principles in that sector.
Ghana has recurrently been wrestling with energy crisis since 1984, and this means 30 years of mere political lamentations and systemic failure to holistically arrest this canker. This is a great indictment to Ghana. It has been observed that Ghana’s energy crisis props on a weak energy sector (including weak legal and political regime). There is thus a need for rolling out a comprehensive Energy Action Plan that will include extensive legal framework that reflects developmental and socio-cultural peculiarities of Ghana. One major assumption about mankind’s need, which remains largely uncontested, is that the phenomenon of energy has competing political, environmental and economic considerations but the ultimate solution that can unleash the full potential of energy for sustainable development can be delivered mainly by technology.
The primary consumers of electrical energy in Ghana are commerce, industries and residents. However the tariffs these consumers pay do not usually cover the full cost of production and supply as the state provides significant subsidy to cover production cost. Although the Public Utility Regulatory Commission (PURC) is charged with setting and approving tariffs, it is doubtful whether PURC strikes a workable and fair balance between the competing stakeholders in the energy market since it represents the interests of both consumers and providers. A careful observation of political reality in Ghana is that the independence of PURC as a regulatory body is often compromised by government interference in order to avert unpleasant political consequences from tariff levels determined by the regulator according to objective market principles.
However, government’s interventions (subsidies) usually distort energy services and underinvestment in the sector which, mainly, contributes to the crisis. The question is to what extent should consumers be protected? And how does the energy legal framework effectively shields the independent regulatory bodies from political manipulations?
I concede that in a developing country like Ghana with significant number of its populace below or barely on the poverty line, it is important for safety net to be provided by the government to cushion low income groups against high market tariffs. Nevertheless, it needs to be stressed that there must exist a permanent fund out of which energy subsidy is provided by the government so that government does not arbitrary divert resources that could have been invested in the energy sector into subsidisation of tariffs in order to remain politically popular. Thus a well considered legal framework for the energy sector could provide for creation and sustenance of such a fund.

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