ECG Is In No Position To Give Free Electricity – ACEP

Energy sector think tank, Africa Center for Energy Policy (ACEP) has warned that Government’s announcement of intent to share free electricity for the next three months is an act of populism that will worsen the already bad state of the finances of the Electricity Company of Ghana (ECG).

Ben Boakye, Executive Director of ACEP, has widely been reported as saying that the populist move by the government, seen as a vote-wooing bait, is also a carrot-and-stick trick that Ghanaians will end up paying for.

“With our understanding of how the energy sector operates and its challenges, we thought that it was populist. If you look at how burdened ECG is currently, they are not able to generate enough revenue currently. The inefficiency still exists so this intervention is rather going to deepen the woes of ECG.” He said.

The reaction comes in the aftermath of the presentation of the mid-year budget review by Finance Minister, Ken Ofori-Atta, to Parliament.

Through that presentation in which the government asked for over Ghc11billion more to spend for the year, Mr. Ofori-Atta announced that free electricity that the government had announced for people living within the Greater Accra and Ashanti Regions during a partial lockdown will be extended to the rest of the populace for the next three months.

According to him, the government will continue to offer “subsidized electricity consumption for the people and for businesses, large and small, by 50 per cent to 4 million (4,086,286) households and nearly 700,000 (686,522) businesses at a cost of GH¢1.02 billion” as was the case from March 2020 for three months. However, the free supply of water will be limited to “lifeline customers.”

ACEP’s Ben Boakye points out that the move can backfire.

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