The power sector shortfall remains large and growing, as electricity tariffs represent only 73% of cost recovery levels, with a large differential between household and business tariffs, the International Monetary Fund has said
This tariff has also increased just 5% since 2015.
“A tariff review was scheduled for July 2021. The authorities’ modeling analysis suggests that adjusting tariffs to inflation would be needed to bring the annual financial shortfall from electricity generation under US$500 million by 2024”, the Fund said.
The Bretton Wood institution said the Electricity Company of Ghana continues to suffer large technical losses, reaching ¢3 billion in 2018, a significant deterioration compared with 2016 and 2017.
To address these losses, it proposed a private concession that was agreed in April 2019, but subsequently terminated due to governance concerns.
It said the ECG continues to manage electricity distribution, without a clear reform plan.
A metering system is being put in place to address power theft and losses.
But the IMF said “the cash waterfall mechanism now distributes revenues more evenly across the sector, but is creating new cashflow issues for SOEs across the supply chain. The increase in power consumption in 2020 exacerbated technical and commercial leakages in distribution”.
The IMF also cautioned that about the financial shortfalls in the gas sector which it says is a growing challenge, exacerbated by infrastructure bottlenecks, and tariffs that do not reflect cost recovery.
Latest Stories
-
GPL 2023/24: Kotoko draw with Medeama; Samartex go 7 points clear of Nations FC
10 mins -
Mahama cuts sod for construction of new multipurpose Jakpa palace in Damongo
31 mins -
NSS management assists Papao fire victims
59 mins -
EXPLAINER: Will dumsor end soon?
1 hour -
IMANI Africa takes on EC, accuses it of lying and publishing half truths
2 hours -
Manasseh Azure calls for investigation and prosecution of those responsible for GRA/SML contract
3 hours -
Kwesi Atuahene: Ghana’s health capital depends on HealthTech – Africa Center for Digital Transformation
3 hours -
13 signs your wife is planning on leaving you and you have no idea
3 hours -
IMANI Africa: Ghana’s EC’s dangerous and pathological conduct
3 hours -
If I speak there will be fire – Salah on Klopp row
4 hours -
Grieving after divorce is normal, but this particular kind of grief isn’t
4 hours -
10 beautifully unexpected ways husbands proposed to their wives
4 hours -
Reality zone with Vicky Wireko: Painting Ghana purple: Be aware, May is month of mental health awareness
4 hours -
Prof Opoku-Agyemang’s integrity is admirable – Inusah Fuseini
5 hours -
Your reign has been a beacon of wisdom – Alan Kyerematen tells Asantehene
5 hours