Imani Centre for Policy and Education presented a paper on the linkages between government energy policies and poverty reduction programmes, focusing on the case of Ghana at the just ended delocalized meeting of the joint committee on Energy and Mines, Industry and Private Sector, Agriculture, Environment and Natural Resources and Infrastructure of the ECOWAS Parliament which was held in the Ivorian National Assembly, Abidjan- Plateau from 10th to 14th August 2021.
Presenting the paper on behalf of Imani, Mr. Dennis Asare, an internal consultant, explained that access to energy secured and reliable energy is critical for sustainable development in West Africa. Mr. Asare revealed that energy access in the sub-region has not increased to meet the growing population in the last two decades. As a result, 174million people continue to live without electricity, and 335million people do not have access to clean cooking fuel. He also pointed out that while the region’s energy access has been satisfactory, countries such as Ghana, Cape Verde, and Cote d’Ivoire have made remarkable improvements in electricity access. However, improved access to electricity is characterized by supply intermittency, high transmission and distribution losses, and emergency power arrangements and expensive fuels leading to a relatively expensive end-user tariff. The huge energy access deficit has contributed to increased inequality in West Africa.
Mr. Asare explained that through the implementation of several energy policies, Ghana has recorded a significant increase in access to electricity from 67% in 2010 to 85.3% in 2020, and achieved 100% and 70% urban and rural access respectively. Mr. Asare further explained that the nexus between energy access/consumption and overall real GDP has been well established in Ghana and demonstrated during the power crisis from 2014-2016, where Ghana lost an estimated 1.8% to 2% of growth due to the power shortages. He revealed Ghana has a slightly higher average end-user tariff of US$0.15/kWh compared to the Sub-Saharan Africa average of about US$0.14/Kwh. A breakdown of the tariff structure reveals that the non-residential and Special Load Tariff categories pay high tariffs. For example, non-residential consumers pay an average end-user tariff of US$0.23/kWh in addition to a fixed monthly service charge of US$ 2.32. The tariff is higher for high voltage customers excluding the mines, medium voltage, low voltage, and high voltage (including mines), who pay US$0.15/kWh, US$0.16/kWh, US$0.21/kWh, and US$0.31/kWh respectively. All Special Load Tariff consumers pay a monthly service charge of US$9.27 for low voltage, and US$12.98 for other special load tariff consumers. This is also worsened by the high technical and commercial distribution losses of about 25%, and transmission loss of 4.5%.
As a result of these underlying challenges, increased access to electricity has not translated into reduced poverty levels because employment sectors like businesses and industries are unable to pay for more power. An analysis of the poverty situation revealed that, while average real GDP has been relatively stable before and after the power crisis, 1% increase in real GDP led to only a 0.17% reduction in poverty from 2005 to 2013, and 0.07% from 2013 to 2017.
Finally, Mr. Asare called on West African governments to take active steps to reduce the average end-user tariff since it is a major indicator of the final investment decision. He also urged governments to prioritize infrastructure investment to improve reliability and security in power supply to drive industrialization and work with the ECOWAS Regional Centre for Renewable Energy and Energy Efficiency (ECREEE) to explore feasible alternatives to involving the private sector in the implementation of the Regional Off-Grid Electrification in order to increase the share of renewables in the energy mix.
Other presenters for the workshop were the West Africa Power Pool, the ECOWAS Regional Centre for Renewable Energy and Energy Efficiency (ECREEE), Hon. Dominic Azumah (Former Member of the Ecowas Parliament), Power Africa Off-Grid Project, and the Ivorian Ministry of Mines, Petroleum, and Energy.
Keynote speakers for the workshop included the Speaker of the Ivorian National Assembly, Rt. Hon. Amadou Soumahoro, the Speaker of the ECOWAS Parliament, Rt. Hon. Sidie Mohamed Tunis, the Minister of Mines, Energy, and Petroleum of Ivory Coast, Mr. Thomas Camara, the Deputy Minister of Foreign Affairs, Integration in Africa, and Diaspora, Mr. Alcide Djedje.
Please find attached the adopted report at the end of the meeting.
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