Power blackouts put economic growth, Ghanaians dreams on hold
JOSEPH Nyame was doing very well as senior plant operator at the Sha-Sha Natural Fruit Juice company near Ghana’s capital Accra until a wave of power cuts forced the firm out of business.
Now Nyame makes his living on the street, selling cheap Chinese plates to office workers, a victim of the West African nation’s energy crisis. His dreams of getting ahead were on hold, he said, as he unpacked plates in the small house he rented with three other families.
“My heart is not in what I am doing,” Nyame said. “I’m a shift leader at the plant and that’s what I do best. But I have to look after the family so anything goes for now.”
Economic growth in Ghana, once a favourite of investors in Africa, has been slowed by a fiscal crisis that has forced the government to seek International Monetary Fund (IMF) support and undermined its reputation abroad for financial management.
But it is the energy crisis that has most sapped business confidence at home and angered ordinary Ghanaians ahead of elections due next year.
Blackouts are a fail-safe way to raise a nation’s blood pressure. In Ghana, they last for up to 24 hours, plunging homes into darkness and cutting off fridges, TVs, water pumps and fans. Costs for those who can afford generators have soared.
The frequent outages have acquired bogeyman status and the slang word for power cut in the local Twi language, dumsor, is the subject of comedy skits, protest marches, and a hashtag campaign, #DumsorMustStop.
The blackouts have become a symbol of Ghana’s abrupt downturn just a few years after it started producing oil in 2010, making a nation that already exported gold and cocoa one of the hottest growth markets in Africa.
Restoring reliable power is critical for President John Mahama ahead of next year’s election. Discontent over power and the economy could tip the balance in favour of opposition leader Nana Akufo-Addo, whom Mahama narrowly beat in 2012.
The government says Ghana has a long-term problem generating enough power given that demand is growing at
The energy crisis has sapped business confidence at home and angered citizens ahead of elections.
10 percent a year, but that argument has failed to soothe voters, prompting Mahama to take personal responsibility for solving the problem.
He created a Ministry
for Power in November and aides say he is involved in the details of electricity generation.
“I, John Dramani Mahama, will fix this energy challenge,” he said in a State of the Nation address in February.
Restoring power may prove no easier than stabilising an economy beset by debt of almost 70 percent of gross domestic product (GDP), a stubborn budget deficit and a weak currency. The cedi is down one-fifth this year after falling 31 percent in 2014.
“Ghana’s debt problems are very severe… It is not easy to achieve a turnaround,” Razia Khan, the head of Africa research for Standard Chartered bank, said.
Ghana agreed on an aid programme with the IMF in April but economists say pressure on the cedi shows investors remain unconvinced. They also cite a 400 million cedi (R1 billion) domestic bond sale that was open to foreign investors but which was undersubscribed despite the IMF deal.
A senior African banker, who asked not to be identified, described Ghana as a “basket case” economy and said his major international bank would not invest there in the near future.
Deputy Finance Minister Cassiel Ato Forson said the government had a clear plan to improve the economy and that prospects were bright.
Morgan Stanley has cut its 2015 growth forecast for Ghana from 5 percent to 3 percent due to the power cuts. – Reuters