COVID-19 free 50% power: ACEP predicts doom for Ghana’s debt-ridden power sector
- The Africa Centre for Energy Policy (ACEP) has predicted challenges in the debt-ridden power sector following a decision taken by the government
- The government has decided to absorb 50% of the cost of electricity for residential and commercial users
-According to ACEP, this could lead to a huge bill the government would have difficulties settling
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The Africa Centre for Energy Policy (ACEP) has raised concerns about the government’s decision to absorb 50% of the electricity bills of residential and commercial users for the next three months.
The Centre is convinced that the decision could be the final nail in the coffin of the debt-stricken sector which is already facing challenges.
ACEP revealed that the decision is likely to cost the government about GHC1 billion each month, bringing the total cost to approximately GHC3 billion.
READ ALSO: World Bank report shows sub-Saharan Africa may record first recession in 25 years
Per a report by the Business and Financial Times, the Executive Director of ACEP, Benjamin Boakye, argued that the government can barely afford the bill.
Boakye, as well as other industry experts, have stated that the intervention could lead to financial chaos in the sector.
This, they explained, is because there could be challenges if the government fails to settle debts owed the sector.
YEN.com.gh has learned that the government owes Independent Power Producers (IPPs) that generate almost 50% of the nation’s energy needs and their gas suppliers about US$1.5 billion.
In other news, international rating agency, Fitch, has predicted a slowdown in the power sectors of a number of sub-Saharan countries, including Ghana.
Fitch explained that the slowdown is a possible result of the outbreak of the coronavirus which has been reported in several countries all over the world.
It explained that the slowdown is a possibility because a fall in economic activity leads to less export revenues as well as weakened local currencies.
READ ALSO: Goldman Sachs predicts sub-Saharan Africa could need $75 billion to fight COVID-19
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Source: YEN.com.gh
