Feature by Godwill Arthur-Mensah
Accra, Jan. 30, - There is no
doubt that the energy sector is the engine for socio-economic development. This
was clearly manifested when the country suffered prolonged power crisis from
2012 to 2016 culminating in the collapse of many businesses, slowing down
economic growth and making the national economy uncompetitive.
The debilitating energy crisis,
popularly known in local parlance as “Dumsor,” attracted international and
local attention, and became a prominent topic in national discourse, especially
during the 2016 electioneering.
One major lesson Ghanaians ought
to have learnt from the power crisis is that the pace of the country’s
development slowed down considerably and made the economy uncompetitive.
It is worthy to note that the
national economy would not make any meaningful headway if it is not supported
by a strong and efficient power sector.
The Ghana Employers Association
(GEA) has reported that more 13,000 people lost their jobs during the power
crisis in 2015 alone. Those hardest hit were small-scale businesses and
economic enclaves encompassing food vendors, carpenters, market women and
artisans.
It is for these reasons that the
Government has taken some bold initiatives intended to arrest the power challenge
once and for all.
Energy as a Catalyst for
Development
Ghana is said to be on the path
of industrial development with high expectations that it would propel
improvements in the economic and social lives of the people in the
not-too-distant future.
Power has been identified as a
binding enforcer to business growth and socio-economic activities. Economists
point to a correlation between a nation’s economic development and the amount
of power it consumes. This is evident in Ghana, especially as the nation is
gradually emerging from an energy crisis.
A Report by the Institute of
Statistical, Social and Economic Research (ISSER) of the University of Ghana,
shows that the country lost over $24 billion as a result of the power crisis between
2010 and 2016.
To paint a more vivid picture,
the lack of sufficient and reliable power denied Ghanaians access to quality
healthcare, education and other important infrastructure and social amenities.
Therefore the energy sector and
its role as a catalyst for accelerating national development cannot be
overemphasised. In that regard, the potential and capacity of the northern
regions of Ghana emerging as the food basket and industrial hub of Ghana
assumes a priority position.
Government’s Policy to develop
the three regions of the north
The Millennium Challenge Account
(MCA) Power Compact Programme to the northern sector is, therefore, crucial.
This is because in the past government had introduced several initiatives and
development interventions into the three regions of the north, many of which
have not yielded the intended outcomes due to several factors, including lack
of sustainability and sufficient electricity supply.
Many parts of the three regions
of the north have lacked electricity for decades, with an average of not more
than 50 per cent access to electricity, compared to over 95 per cent
penetration in the Greater Accra Region alone.
Although agriculture remains the
dominant economic activity in the Northern Electricity Distribution Company
(NEDCo) operational area, however, the recurrent inadequacies in the supply of
water and erratic rainfall patterns contributed largely to the endemic poverty
situation in the three regions.
For this reason, every
intervention that supports policy reforms and facilitates projects such as the
One-Village, One-Dam and the One-District One- Factory presents excellent
commercial opportunities capable of lifting the people out of poverty and
improving their economic situations.
One such intervention is the
irrigation schemes, which would require reliable and sufficient power supply to
ensure their effective operations, and this is where NEDCo comes in.
NEDCo, which was weaned off the
Volta River Authority (VRA) in 2005, was established to develop and manage the
distribution of power in the Upper East, Upper West, Brong Ahafo and the three
regions of the north.
However, the absence of
significant investments into NEDCo’s operations over the years, led to the
NEDCo Financial and Operational Turnaround (NFOT) project being conceptualised
under the MCA’s Power Compact Programme.
MiDA’s Timely Intervention
According to the Business Plan of
NEDCo, the NFOT project is one of six projects under the Power Compact
Programme being implemented by the Millennium Development Authority (MiDA),
with a budget of US$65.7 million, which comprised four sub-project activities.
They include improvement in
electricity services to the Central Business District of Tamale and improving
the customer mix in NEDCo’s operational area by attracting and serving more
commercial customers.
Ultimately, the MiDA
interventions under the NFOT project sought to develop NEDCo into an efficient
and self-sustaining power utility that would spearhead economic growth in
northern Ghana.
Mr Mawunyo Rubson, the MiDA
Director in charge of Generation Project, noted that NEDCo, like the
Electricity Company of Ghana, is a critical electricity distributor and pivotal
to its financial and operational viability is the role of the Millennium
Challenge Corporation’s funded Service Provider, which is serving as a world
class private sector energy services consultant.
He said the consultant was
supposed to work with the Management of NEDCo to build their capacity and
entrench operational efficiencies over a three-year period.
Mr Rubson indicated that at the
end of the consultant’s engagement, NEDCo’s potential to operate as a
self-sustaining company with capacity to offer secured employment and sustained
profitability would be evident.
Anticipated Impact of the NEDCo
Project
Mr Rubson said MCA’s US$65.7 million grant fund, which was
being invested into the NEDCo operations was timely because it would improve
its network areas, covering commercial centres like Techiman, Sunyani,
Kintampo, Wa, Bolgatanga and Sawla.
He said the proposed projects
have the potential of increasing NEDCo’s electricity sales by an average of
US$11 million annually between 2018 and 2025, (representing approximately four
percent of total electricity sales and would increase total annual revenue of
the firm by nine percent per year).
He said sustainable power would
lead to increase in NEDCo’s customer base and provide a major boost to its
sustainability.
Mr Rubson noted that apart from
improving the efficiency of their operations in the Tamale Metropolis, the
Compact’s intervention would particularly support the agricultural industry by
providing power to factories, agribusiness processing operations and farms.
Besides it would provide reliable
medium voltage electric service to the newly established 5,700 hectare AgDevCo
Farming Hub, located close to Babator in the Bole District of the Northern
Region.
When this is done, AgDevCo, which
seeks to raise agricultural productivity, increase farmer incomes, create
employment for our youth and, ultimately, reduce food insecurity, hunger and
poor nutrition in rural communities, would attract many other commercial
farming businesses in the form of out growers and offer employment
opportunities to the people.
Feasibility Studies on the
Project indicate that over 150,000 farmers are likely to benefit from the
AgDevco Farming Hub. This will be a major complement to the Government’s
Planting for Food and Jobs Programme.
Local farmers can also take
advantage of the electrical infrastructure provided and benefit from the
irrigation resources available through the AgDevCo Programme.
With relatively cheaper, reliable
and high quality electric power, AgDevCo would be assured of cost
competitiveness in the commercial agricultural market space in Ghana and would
in turn provide improved economic opportunities for all related businesses.
In line with the national agenda
to ensuring universal electricity access by the year 2020, the village of
Babator and some other villages along the road from Bamboi to the AgDevCo site
would soon benefit directly from some 37km of LV power to be extended under the
programme.
This has the potential to ignite
various small-scale business activities such as sheanut processing and unleash
the potential of the Mole National Park as a tourism destination.
Empowering Men and Women by
Enhancing Access to Power
The provision of reliable power
to markets and other economic enclaves would yield several benefits to
communities working at getting out of poverty.
The Tamale Central Market and the
Tamale Timber Market are earmarked to benefit directly from the intervention to
provide reliable and quality power to these important commercial hubs in the
Tamale Metropolitan Assembly.
The long-awaited Tamale Project
would involve the changing of the old transformers that feed the social
infrastructure, replacing the very old and sagging electrical cables and
provide security lighting for the markets.
Traders can now look forward to
extended business hours. Cold Storage businesses, which offer services for the
preservation of meat, fish and other items, can look forward to their trade
fortunes rising. Mechanics,
seamstresses, hairdressers, carpenters, barbers, and other artisans can be sure
that access to reliable and quality electricity, which impacted on their
businesses, will improve.
Partnering MiDA
Every programme that the
Government has successfully implemented has called for stronger partnership and
commitments from government agencies and the citizenry. The US Government
funded Compact I Programme delivered a successful agricultural programme,
through the collaboration of the Ministries, Departments and Agencies such as
the Roads and Highways, Food and Agriculture, Lands Commission, Ghana
Irrigation Development Authority, Environmental Protection Agency, Ministry of
Education and some metropolitan, municipal and district assemblies.
Implementing Entity Agreement
(IEA)
An IEA is a condition precedent
to the release and the channelling of compact funds to a project implementer
through the Accountable Entity. As with all MCC-funded projects, NEDCo will be
required to sign an IEA with MiDA to facilitate the implementation of the
project. The progress of work on the projects envisaged under the NEDCo IEA
will require the commitment and collaboration of the Accountable Entity, made
up of MiDA and other entities including the Volta River Authority, Environmental
Protection Agency, Lands Commission and the Public Utilities Regulatory
Commission.
GNA
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