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Opinions of Friday, 27 February 2015

Columnist: Boasiako, Antwi Peter

Unforgettable effect of electricity power crisis (dumsor) on our national economy.

When power failures or power crisis is discussed in advanced countries, a common sense approach normally considers the effect it has on corporate businesses, multinational companies and the national health delivery, before one even thinks of the effect it may have on the plenary pleasure that one may miss as a result of blackouts.

On Ghana's issue of dumsor (power shedding) across the nation over the past three years, one can only imagine how much money the country has lost; the unemployment it has generated, how many people have died and how many investors have withdrawn their decision to invest in Ghana as a result of the consistent uncontrollable and unreliable power supply in Ghana.

One thing worth considering is, even in advanced countries, businesses cannot accept disruptions caused by power blackouts, much as they cannot estimate the true cost and impact that it can have on their operations. On other hand, businesses in developing countries turn not to bother at-all to calculate how much money/profit can be lost due to even occasional power interruptions; simply because, power failures, and indeed, long power outage is something very common and seen as normal.

In the 2013 World Bank Enterprise Survey on African countries, including Ghana and Nigeria, it named the on-going rampant poor electricity supply as one of the biggest barriers to growth of the countries' economy, and hindrance to many multinational investors.

This issue of unreliable power supply has been the main potential contributor to the large productivity gap between developed and developing countries. Insufficient and unsustainable power supply is a major problem in Ghana today. The first major consideration in any feasibility studies for any multinational manufacturing company to invest in a developing country is the assurance of a sufficient reliable power supply.

In advanced countries, while majority of power failures from national grid last only a few hours, blackouts that last days or even weeks are classified as major catastrophic failures that can completely shutdown production in companies, including critical infrastructures such as telecommunication networks, financial services, water supplies and hospitals. This situation is extremely very unusual.

It is by no means that the power outages in Ghana have had serious disastrous effects on many areas of our national economy. Human lives have been lost due to life-support system failures. Hospitals and nursing homes have suffered loses, and companies have collapsed, all due to consistent power failures. Co-ordination facilities such as airports/Aviation, and traffic controls are still suffering.

Corporate Ghana Port and Harbour Authority (GPHA) was reported to have lost over US$100,000 profit in 24 hours continuous power failure at Tema Harbour site. Can one imagine how much money Ghana has been losing from Tema Harbour alone for past three years with this constant dumsor dumsor situation? Your guess could be as good as right for the money lost from the manufacturing companies such as Accra and Kumasi Breweries, Ghacem Ltd, Guinness Ghana ltd, and many other companies which require 24 hour power supply.

In USA for example, an analysis from blackout events show that a 30-minute power cut results in an average loss of US$28,709 for medium and large industrial setups, and nearly US$95,000 for an eight-hour interruption. Even short blackouts – which occur several times a year in the US – add up to an annual estimated economic loss of between US$104 and US$164 billion. How much more Ghana, that has had more than 12 hours and sometimes 24hrs power failures intermittently in a week for the past 3-years?

Should the dumsor dumsor finally cease or be drastically reduced by the end of 2015 as widely noodle around, will it inure to the political fortunes for the incumbent party in power?, a government that has mismanaged the dumsor situation - situation that was clearly avoidable?

This question, I believe can best be answered by few who have lost their loved ones due to life-support systems power failures in hospitals. This can best be answered by majority of factory workers who have lost their jobs as a result of the Dumsor. Students who have struggled to study in the night for the past 3-years, entrepreneurs who couldn't bear the cost of running generators to keep their businesses and for that matter, have had their businesses collapsed, they can answer it better.

This depressing dumsor situation in Ghana is having serious detrimental indelible impression on the memory of the majority of Ghanaians and I doubt how Ghanaians can easily forgive President Mahama/NDC in the next elections, no matter how things improve soon.

Electrical Power, in the short span of two centuries, has become an indispensable part of modern day life. Our work, leisure, healthcare, economy, and our very livelihood depend on a constant supply of electrical power. One may not believe it, but even a temporary stoppage of power can potentially lead to relative chaos at train stations and airports, and also big monetary setbacks in investment trading companies and possible loss of life in many countries, including Ghana.

Our cities today live on electricity and without reliable power supply from the power grid, pandemonium will certainly break loose, especially in advanced countries. Ghana has no choice but to vigorously improve on its power supply if it wants to have competitive advantage over its neighbouring countries.

Poor maintenance culture in our African Countries, coupled with low quality infrastructure for power plants, and the lack of political will for putting incentives in the area of power generation are the most stark examples of infrastructure failures resulting in electricity supply failures in Ghana, for example.

While we can appreciate that loss of power in smaller scale settings may not be life threatening, it can certainly result in lost of data, missed deadlines, decrease in productivity, and loss of revenue.

My next write up on this topic shall be on the causes of this avoidable long dumsor situation in Ghana and the government's failure to manage the situation.

Peter Antwi Boasiako. London.