Erratic power supply costs the country’s economy about US$622million per annum — and given the magnitude of the current crisis the figure could increase this year, the Institute of Scientific, Social and Economic Research (ISSER) of the University of Ghana has said.
This is the first evidence-based research that has been conducted to ascertain impacts of the ongoing energy crisis on the economy.
ISSER in its latest Ghana Social Development Outlook report stated that power failures are costing the Ghanaian economy a whopping amount of between US$320million and US$924 million — excluding indirect costs — or between two percent and six percent of gross domestic product (GDP) every year.
The Ghana Social Development Outlook further indicated that the lack of a reliable supply of electricity will have significant impacts on economic productivity, and that will further stifle social development.
Ghana has been experiencing erratic power supply over the past three years, which has led to several thousands of jobs being lost in both the formal and informal sector as the situation worsens year on year.
It is feared government’s target to resolve the energy situation by the end of the year could be missed, as already attempts to bring in emergency power barges from Turkey by April-ending to shore-up supply is to be missed.
The report, which was launched in Accra on Friday, also showed significant lapses and gaps in citizens’ access to improved services in key social thematic areas including education, health, water and sanitation and governance.
According to the report, the recent surge in economic and commercial activities over the years has had little impact on the quest for improved socio-economic development and improved standards of living in the country.
For instance, in the area of health, the report cited decreasing budget allocation, inadequate health manpower and the fact that access to improved healthcare remains concentrated in the Greater Accra Region as a worrisome trend that requires immediate intervention.
On the educational front, it indicated that there has been less policy and research attention at the tertiary level — leading to significant expansion of the sector in an “unbridled, unplanned and chaotic” manner.
The situation was no different in other sectors such as housing, water and sanitation as well as work and employment.
“Despite the fact that access to potable water has seen encouraging improvement, access inequalities still exist at the national, regional and rural-urban levels.
“Also, there has been no significant improvement in sanitation in both urban and rural communities due largely to increased urban migration and lack of access to toilet facilities that gives room for open defecation.
“Public access to affordable housing remains a social challenge in the wake of the housing boom; this is because efforts at solving the problem has been short-sighted while most policy documents to salvage the situation remain in the draft form,” the report said.
Given that donor funds to the sector has declined, the report called for an increase in premiums paid to the National Health Insurance Scheme (NHIS) as well as a national forum on health financing to gather alternate funding avenues to cushion improved healthcare delivery.
It also advocated for increased investments in various social sectors of the economy to ensure rapid socio-economic transformation.
Project Coordinator Dr. Adobea Yaa Owusu, in a summary presentation, called on policymakers to adopt proposed indicators in the report as a milestone to spearhead social development.
“Social development is driven by robust social policy that will serve as the benchmark for better conditions of living; this report has a social development policy focus and we hope that it will generate the needed dialogues and practical moves toward enhanced socio-economic development,” she said.
Vice-Chancellor of the University of Ghana Prof. Ernest Aryeetey said the Ghana Social Development Outlook is an important research document that will inform discussions on social development, as it brings to the fore various hindrances in key social sectors of the economy.
He said the report was informed by the commitment of the University of Ghana to support social development through provision of relevant data that serve as indicators of policy decisions.
“The relationship between social and economic development has become more relevant today; most of the time we lament the absence of data for policy decisions and academic research — and that is why ISSER is poised to bridge that data supply gap through the provision, analysis and sharing of relevant data,” he said.
Source: BFT
