KEEPING FAITH WITH THE NPP MANIFESTO ON POLITICS OF TARIFF ADJUSTMENTS AND ENERGY SECTOR IMPROVEMENTS.
Electricity is one of the major determinants of the economic prosperity of any country since it plays an extremely significant role both at the domestic level as well as the arena of propelling national economic development in the industrial sectors. Electricity is also essential for quality healthcare delivery, education, transport, effective communication, mineral exploration and many more; serving as the building block on which every sector of a nation’s economy thrives.
The NPP tradition with its unwavering conviction in making life worth living in society, under the presidency of Kufuor-led government from 2001 2008 made significant contributions to the countrys energy resources and infrastructure in pursuance of our bold and visionary policies in achieving a global standard on energy stability. These policies yielded a number of results, these included the discovery of oil and gas in commercial quantities; and the construction of the West African Gas Pipeline. Also in response to the emerging energy crisis of 2006/2007, through facilitations, procurements, and construction, the then NPP Government under Pesident Kufuor added 1440MW to Ghanas generating capacity, thus, through Bui Dam (400MW), Tema Thermal 1 Power Plant – TT1PP (126MW), Tema Thermal 2 Power Plant TT2PP (49MW), Mines Reserve Plants (80MW), Kpone Thermal Power Plant (220MW), Additions to Akosombo Hydro Power (108MW), Takoradi 1 Power Plant T1, Aboadze (132MW), Sunon Asogli Plant (200MW), and Osonor (now CENIT) Plant (126MW).
All these initiatives cushioned the Ghanaian business man and woman against unreasonable tariff adjustments systems right after 2007 to 2009 where we handed power to the NDC without DUMSOR.
The energy sector under the NDC was badly managed to the extent that the country was virtually dependent on trial and error approach.
Their poor management exposed the sector to huge shortfalls in power generation, corrupt and cloudy procurement of new power plants without recourse to cost benefit analysis. Frequent power cuts, inefficiencies and unsustainable inter-utility debts threatened the satisfactory long-term operation of the power sector of this beloved country of ours.
Their poor management of the sector led us into close to five years of DUMSOR to DUM KURAA, the effect of which had a devastating damage to the nation’s economy, including quality health care, industrial growth and survival, education, transport, effective communication, mineral exploration among others. The Institute of Statistical Scientific and Economic Research (ISSER), in its 2014 study, indicates that on the average, the country was losing production worth about US$ 2.1 million per day (or, US$ 55.8 million per month) as a result of DUMSOR alone and that, the country lost about US$680 million in 2014 translating into about 2% of GDP due to the power crisis.
Whiles the energy sector was facing an unprecedented financial crisis the consumer was challenged with unreasonable tariff increments which was unjustifiable. Its on record to note that in June 2010 there was an increase in tariff by 89% which never brought any improvement to supply of power; again in October 2013 tariffs were increased by 78% with nothing to show. As if that was not enough the Public Utilities Regulatory Commission (PURC) announced a 59.2 percent increase in electricity tariff and 67.2 percent in water tariff for residential consumers. The new tariffs took effect from December 14, 2015.
In response to the cry of the citizens, the then President Mahama explained that the cost of power generation was becoming more expensive and that; If we do not want dumsor and we genuinely want reliable and sustainable power, then we should be ready to pay more and that is the reality,”. He further asserted that while speaking on Garden City Radio in Kumasi Monday 19th October 2015.
It was at this juncture that the then candidate Nana Addo Dankwa Akufo Addo issued a statement on the 26th May 2016 asking the NDC government then to stop the propaganda and crocodile tears and reduce electricity tariffs immediately. The NPP then went further to outline several policies in its manifestos for the election 2016.
In chapter two under Trade and Industry, the party recognized that the energy sector was by far one of the biggest challenges to industry and business growth as a result of; unreliable and unstable power supply for industrial production, otherwise known as DUMSOR, inadequate, industry-targeted power supply polices, and the high cost of energy across board for industries and businesses as well as domestic utilization.
In addressing this canker the NPP promised to solve DUMSOR, by ending the unreliable electricity supply crisis and re-orient energy tariff policy to reduce the burden on businesses.
Upon assumption of office in January 2017 H. E Nana Addo Dankwa Akufo Addo quickly took the necessary steps to end DUMSOR which resulted in industry growth from -0.5% in 2016 to 17.7% in 2017 as contained in appendix 1A of the 2018 Budget statement.
On the 5th March 2018 the NPP government again fulfilled yet another significant manifesto promise by reducing the tariffs for residential customers by 17.5%, while non-residential customers saw a tariff cut of 30% in addition, those in the mining sector had also been given a 10% tariff cut. This tariff cuts resulted in increased revenue and productivity.
Again under chapter three of our manifesto we indicated that we were going to reduce taxes on electricity tariffs to provide immediate relief to households and industry. This promise saw prominence in President Akufo Addo achievements by the implementation of the following tax cuts measures:
- Abolishing excise duty on petroleum
- Reducing the special petroleum tax rate from 17.5% to 15%.
- Reducing the National Electrification Scheme Levy from 5% to 3%
- Reducing the Public Lighting Levy from 5% to 2%
Its therefore not surprising to see the NDC, a party that believes that Ghanaians have short memories, turn around to remind us that tariffs have been increased by 11.17% effective July 1 2019. Its refreshing to note that with this current proposed increment Ghanaians will still be paying less than what they were paying under Mahama in 2016. Cumulatively the NDC has increased electricity tariffs by 226.2% whiles the NPP has cumulatively reduced tariffs by 6.33% for residential customers, 18.83% for Non-residential customers in the space of two and half years.
The alternative in John Mahama is still scary as the NPP has always been the better managers of the economy of this country.
Deputy National Communications Director
New Patriotic Party