Electricity debt ridden govt offers free power in coronavirus fight

The Akufo-Addo government has now decided to absorb the electricity bills of low-income consumers in the country for April, May and June in addition to the free water to all Ghanaians from April, May and June amid the Coronavirus pandemic, lockdown.

But the trouble is not the difference in what Ghanaians are getting compared to what Alpha Conde is giving Guineans; totally free electricity, free water, free transport, free pharmaceuticals and the suspension of rent payments, the problem will be the Akufo-Addo government’s ability to pay debts owed the Ghana Grid Company Limited (GRIDCo), the Electricity Company of Ghana (ECG), VALCO, NEDCo and others, to be able to provide the much-needed power.

Over the years, governments’ inability to service debts owed GRIDC and the power generating companies like VRA, Ameri, Karpower, Asogli among others has many times led to power cuts popularly called “Dumsor”. It is not clear if the implications of this decision, has adequately been weighed and thought through thoroughly by the government.

Ahead of yesterday’s announcement by President Nana Akufo-Addo, Ghana’s Eastern neighbours; Togo, had its President, Faure Gnassingbé announced no water and electricity bills for the next three months in the West African country also as part of measures to make life easier for Togolese as the COVID-19 spreads worldwide.

But in Ghana, where 378 cases have been recorded, President Akufo-Addo, announced his government is slashing electricity bills for certain some consumers for the next three months, however, others vaguely defined as “poorest of the poor” will see a total write-off of their electricity bills just like their water bills which in itself, has created some mixed reactions, because many homes in the country, have no water from Ghana Water Company and other state-owned companies.

“We have decided further measures of mitigation for Ghanaians for the next three months…Government will fully absorb electricity bills for the poorest of the poor, i.e.: lifeline consumers. This will cover persons who consume 0 to 50-kilowatt hours per month for this period. This forms part of relief interventions by the state amid the novel coronavirus pandemic. Other categories of consumers will enjoy a 50 per cent discount within the same period. For all other consumers, residential and commercial, the government will absorb 50 per cent of your electricity bill for this period using your March 2020 bill as the benchmark,” he noted.

President Akufo-Addo’s announcement, was in his sixth televised address to the nation, since the outbreak of the novel Coronavirus in the country.

He explained that, if your electricity bill in March was GHC100.00, you will be paying GHC50.00 “with government absorbing the remaining GHC50.00’. He said the new intervention was to support industries, enterprises, as well as the service sector in these difficult times “to provide some relief to households”.

He urged Ghanaians to exercise discipline in the use of electricity and water.

President Akufo-Addo, had in his previous national address on Sunday, April 5, 2020, announced that the government will take care of the water bills for all Ghanaians for April, May and June 2020 following an increase in the country’s coronavirus cases amidst a partial lockdown of the epicenters of the disease; Accra, Tema, Kumasi and Kasoa.

With water-free, many individuals and groups pressured the President to do same with electricity tariffs and petroleum products. Apart from the Minority in Parliament, Former President John Dramani Mahama also asked for subsidization of electricity tariffs amid the Coronavirus outbreak in Ghana.

Mr. Mahama in a statement suggested that “a subsidy payment from the Stabilization Fund to the ECG and other generating companies can provide some temporary relief, however small, to consumers in this difficult period.”

The Progressive People’s Party (PPP) had also asked the President to consider a waiver on electricity bills as part of social interventions put in place to cushion Ghanaians against the impact of the coronavirus pandemic. All these demands were made without the debt situation of the power providers.

In November last year, GRIDCo workers demonstrated in Accra against the Finance Ministry and the ECG over the company’s huge debts to the tune of Ghc1.2 billion in Accra, saying the indebtedness of ECG and VALCO was crippling its operations.

GRIDCo on November 21, 2019, announced that ECG had an outstanding debt of GH¢607 million and another GH¢94,204,903.17 while VALCO owed it GH¢32,567,974.05 and NEDCo’s debt stood at GH¢177 million as at September 30, 2019.

The staff in a petition to the Finance Ministry said the government must act on a directive by President Akufo-Addo to make available to them some GH¢250 million to help them pay the debts, and demanded that the Ministry orders VALCO to settle their US$33 million debt.

“[We demand that the Finance Ministry] order VALCO to settle the US$33 million it owes GRIDCo, which it claims is part of the legacy debt in the energy sector”. “[We demand that the Finance Ministry] immediately orders the ECG to pay GRIDCo the GH¢94 million PDS collected on behalf of ECG during the PDS suspension.”

“[The Ministry must] immediately ensure that the cash waterfall which has been on the drawing board since 2014 becomes operational,” he said.

The worker's leader, Dominic Annang added that; “It has been 7 months since that meeting [with President Akufo-Addo] and not a dime has been paid to GRIDCo. You will recall that the first ESLA bond which was raised by this government in 2017/2018, our colleagues, the VRA had about US$550 million to settle their debts to banks, but not a dime was given to GRIDCo to offset ECG and VALCO’s indebtedness to GRIDCo.”

Dominic Annang further warned that “staff of GRIDCo will continue to embark on series of industrial actions” if the Finance Ministry does not act immediately to settle the debts, adding the company is unable to expand its transmission lines due to the huge debts owed it.

The Guinean government has announced incentive packages aimed at making the country’s citizens comfortable as they observe a lockdown following the outbreak of COVID-19 in that country. President Alpha Conde is reported to have ordered the free supply of water, electricity, transport as well a freeze on the payment of rent until December.

The Guinean President has also put on hold, prices placed on pharmaceutical products as Guinea recorded some 128 COVID-19 positive cases with five recovered cases but no deaths.

The disclosure was made by twitter user Africa Facts Zone in which they wrote: ‘’Guinea has provided free electricity, free transport and free water for its citizens for the next three months. Rent across the country has been frozen till December. Prices of Pharmaceutical products and basic necessities have been put on hold’’.

The President of Togo Faure Gnassingbé on his part said households that consume 10m3 of water each month which translates to a bill of XOF2,000, will be exempted.

For electricity, the incentive excludes the most vulnerable households as long as the bill does not exceed XOF2,520 per month (thus totaling XOF7,560 over the three months of exemption). President Gnassingbe said that the alleviation package of nearly 400 billion CFA francs (about $650 million) is to cushion citizens from the harsh impact of COVID-19.

President Faure Gnassingbe who made the announcement said the state of the emergency period will be for three months while the curfew will be in place for an indefinite period. “Faced with the severity of the situation and in accordance with the constitutional provisions, I declare the state of health emergency in Togo for three months,” the president said.

The curfew which was effective on April 2, 2020, starts from 7 pm to 6 am. In the televised broadcast to citizens, he said the move was “proof of the gravity of the situation that we face.” Togo, a country of about 8 million people, has so far recorded 37 cases of COVID-19, out of which 17 have recovered and 2 have died.