Power in Ghana: When dumsor isn’t dumsor

Ghana is once again struggling with acute power supply issues. However, New Patriotic Party (NPP) officials are struggling to communicate effectively due to the extremely critical stance they took during the 2014-16 power crisis (popularly known as dumsor) while in opposition. Without careful attention, it could be that or worse.

Significance – More than semantics at stake

NPP government representatives are going to extreme lengths to distance the current situation from the 2014-16 crisis, resulting in some clever word-play: to quote the Minster of Energy Matthew Opoku-Prempeh “[it] is not a generation problem, this is not about fuel, so how could it be ‘dumsor’? Dumsor is planned and the timetable is rolled out and it affected the whole country for four years. Is that what we are seeing? No.”

The reality is that the past few weeks have been characterised by mass power outages. Including one wherein the entire country experienced a blackout for two to three hours. Following the national outage, sporadic blackouts have continued and blame for the ongoing issues appears to have settled on the national transmission company, Ghana Grid Company (GRIDCo). Power interruptions are largely attributed to aging infrastructure and work on upgrade projects including a new substation in Pokuase, strengthening of transmission lines between Accra and Tema, and the installation of bulk supply points in Kasoa. Several projects addressing transmission were outlined in the 2021 budget. See box adjacent.

However, more is required. Peak electricity demand grew over 10% between March 2020 and February 2021 alone and is expected to double in seven years. Neither GRIDCo nor the state-owned power distribution company, the Electricity Company of Ghana (ECG), are yet in position to meet that opportunity. Instead, their ability to invest in the necessary modernisation of transmission and distribution networks is undermined by customer arrears and legacy debt issues at the state-owned entities, as well as macro-level constraints encapsulated in the nation’s 76% of GDP public debt and 11.7% of GDP fiscal deficit[1] position.

Disputes with partners are a further challenge. For example, access to USD190 million in funding under the US-backed Millennium Development Authority lost when a concession for ECG was withdrawn by the government following alleged improper insurance guarantees.

Outlook – Scheduling power

GRIDCo has said that certain areas in the country can expect power interruptions to continue up until September but a timetable of planned outages promised over the past two weeks has not yet come to fruition.

Meanwhile, the longer the transmission infrastructure investment gap persists, the more damage is done to the state-owned entities and the national exchequer. One colleague put the cost of failing equipment to government at USD2.5 million per month. Government sources have put transmission losses at as high as 25%.

The current ‘crisis’ is less severe than that of 2014-16; it is nevertheless painful. Ghanaian households and businesses are bemoaning the lack of a reliable schedule to plan and/or protect sensitive equipment from occasional power surges when power is restored.

This far from an election[2] government has an opportunity to be frank about the extent of the challenge and to raise the profile of bodies like the Ghana Infrastructure Investment Fund.

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[1] 2020 Ministry of Finance estimates. The objective is to return the deficit to 5% of GDP over the medium term.

[2] General elections took place in December 2020 and the next is scheduled for 2024.

Photo credit: Songhai Advisory

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