Becareful Of ‘Deceptive’ Promise To Reduce Electricity Tariffs – Jinapor
A former deputy Minister of Power under the Mahama administration, John Jinapor, has accused the President of trying to deceive Ghanaians by suggesting downward review of electricity tariffs in the 2018 budget.
According to him, even though there is a possibility that the tariffs might be reduced for businesses and industries, there may not be a significant reduction for residential users.
Speaking to Citi News‘ Duke Mensah Opoku today [Monday], John Jinapor said: “If you are expecting tariffs, I and any other Ghanaian in their homes should not expect any significant reduction in their electricity tariffs. I don’t want to preempt [the budget], but I see a level of deception just like they did with the three percent VAT and claimed that it would not lead to a significant increase in prices. We can attest that the three percent flat rate is rather having a major impact and is creating problems for industry.”
The President of the Republic, Nana Addo Dankwa Akufo Addo, had hinted over the weekend at the Association of Ghanaian Industries Awards (AGI) dinner, that electricity tariffs will be reviewed downwards soon.
According to Nana Addo, details of the review will be announced by Finance Minister, Ken Ofori-Atta at the 2018 budget reading in Parliament on Wednesday, November 15.
The high electricity tariffs were a major part of the New Patriotic Party (NPP)’s campaign ahead of the 2016 elections, with many of the party’s communicators claiming that electricity cost more than rent.
“I’m glad that businesses are no longer burdened by the erratic power supply that wrecked our nation in recent years. Dumsor, thank God, appears now to be the thing of an unlamented past. Another of the stars of the government, the Energy Minister, Boakye Agyarko, is to be commended for the sterling work he’s been doing so far on this matter,” the President said.
“Furthermore, the government is moving to set in motion the process for the review of electricity tariffs and in the budget to be read by the brilliant Minister of Finance, Ken Ofori-Atta on Wednesday, I’m sure we will hear some good news in this regard.”
However, Jinapor believes that the economic challenges faced by the country this year have severely limited government’s spending power, and so a 25 percent decrease in the tariffs as was being speculated in the media was unrealistic.
“I’ve made it clear that looking at the indicators and doing the computation, I don’t believe that government can give the residential users any significant reduction. I’ve even heard some government appointees indicate that they are even going to give a 25% reduction. Even as we speak, government has not paid a cedi for the gas that we’ve consumed this year. From all indications, we are likely to incur 1 billion cedis additional debt. So even as government attempts to pay what they describe as a legacy debt of about 10 billion, we are not solving the problem. We are just scratching the surface because you are piling new and fresh debt and that is a major concern,” John Jinapor added.
“What I expect government to do is to be transparent and honest and come clean on all the challenges confronting the energy sector. The crude oil prices have increased by about 10 dollars this year alone, and the cedi has depreciated, you can’t pay that and you are promising the ordinary consumer that you are going to reduce their tariff and you are even claiming that you can do a 25 percent reduction. What they intend doing is just to come out with artificial issues and deceive us.”
The Energy Minister, Boakye Agyarko, had hinted of plans to review taxes on electricity to cushion Ghanaians in the budget back in September.
“On the budget, it is our faithful expectation that we should be able to reduce tariffs. We are getting a lot of corporation in so doing. So we believe that through this budget to the end of the year, we should be able to start bringing the prices down,” Agyarko said at the time.
Mr. Agyarko explained that, the government is working to stabilize the price by reducing waste in the power generation and distribution systems.
“When we set out, the commitment was that, we need to correct two things. One was stabilizing power, so that we get the product that we are paying for. I believe that we have largely succeeded in stabilizing the supply of power.”
However, the Minority expressed doubt about the government’s assurances, stating that the expectation of gas coming on stream to power thermal plants as a means of driving down electricity cost for the ordinary Ghanaian would not materialize.