Energy expert Lom Nuku Ahlijah has advocated for a greater role for the private sector in Ghana’s power distribution to address the nation’s ongoing electricity supply issues, commonly referred to as “dumsor.” Ahlijah made these remarks during an appearance on Joy Prime’s Prime Insight program on Saturday, May 2nd.
Revisiting Private Sector Participation
Ahlijah emphasized that private sector involvement has consistently been a key theme in energy sector reform discussions over the past decade and is a concept worth revisiting. He believes this approach holds significant potential for improving the reliability of electricity supply.
Lessons from PDS Arrangement
The expert pointed to the now-defunct Power Distribution Services (PDS) arrangement as a past example that, despite its eventual collapse, illustrated the viability of private participation in the sector. He explained that under the PDS deal, the Electricity Company of Ghana (ECG) would retain ownership of distribution assets and continue with maintenance, while PDS would manage the operational and commercial aspects.
Addressing ECG’s Performance
Ahlijah argued that exploring private participation is particularly pertinent given ECG’s performance trends over recent years. He suggested that while ECG, as a public entity, could be assigned targets, historical data indicates these targets have not significantly resolved the core issues of power delivery. This suggests a need for alternative strategies.
Reducing System Losses Through Incentives
Introducing private operators, Ahlijah posited, could effectively reduce system losses by linking performance to specific, measurable targets and financial incentives. Private entities are motivated by profit, which can drive them to find innovative solutions and mechanisms to improve efficiency and reduce losses. He stated that a private player could be tasked with reducing current system losses, with compensation tied to achieving these reduction goals.
Restructuring ECG’s Operational Areas
Current discussions, according to Ahlijah, are leaning towards restructuring ECG’s operations to allow for broader participation. This involves potentially breaking down ECG’s extensive operational area, which covers the entire southern sector of Ghana, into smaller concessions managed by different private entities. He noted that the sheer scale of ECG’s current mandate may contribute to inefficiencies and service delivery delays.
Scale and Inefficiencies
The vastness of ECG’s operational territory presents significant challenges, Ahlijah explained. Issues such as transformer upgrades and the time taken for such tasks are compounded by the immense scope of ECG’s responsibilities. Allowing other players to manage distinct segments within the ECG concession area could alleviate this burden and improve response times.
Overcoming Labour Resistance
Ahlijah acknowledged the resistance from organized labor, particularly the Trades Union Congress (TUC), to increased private sector involvement. However, he maintained that the focus must remain on achieving tangible improvements in service delivery. He asserted that the persistent issues with ECG’s performance necessitate a broader conversation that includes private sector participation, despite union concerns.
Future Outlook
The path forward likely involves a comprehensive debate on how to best structure private sector involvement. Key considerations will include how to ensure accountability, manage potential labor disputes, and design concession agreements that benefit both the public and private entities. The success of any new model will hinge on its ability to demonstrably reduce ‘dumsor’ and improve the overall efficiency and reliability of Ghana’s power distribution network. Observers will be watching closely to see if these proposed reforms gain traction and translate into concrete policy changes aimed at securing a stable electricity future for the nation.
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