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PROCEEDINGS OF THE WORKSHOP OF POWER SECTOR REFORM: PROCESS AND IMPLEMENTATION EXPERIENCES IN SUB-SAHARAN AFRICA, ACCRA, GHANA

By

Stephen Karekezi and Donella Mutiso


Abstract

Power sector institutions in Africa are characterized by inability to provide adequate levels of electricity services to the majority of the region's population especially to the rural  poor.  In Uganda,  Tanzania and Kenya, only about 6.6%, 7% and 11% respectively of the total population has access to electricity.  In the Democratic Republic of Congo (formerly Zaire), only 5% of the population benefits from electricity supply.   Provision of electricity is largely confined to the privileged urban middle and upper income groups.  For instance, in Botswana 20% of the urban population and 3% of the rural areas have access to electricity.  Most African utilities routinely record unsatisfactory technical and financial performance which compares poorly with their counterparts in other developing countries in Latin America and South East Asia.  Poor technical and financial performance is a common characteristic in almost all African utilities irrespective of the management team that is in charge.  This could be an indication of institutional deficiencies rather than only the more conventional problems of inadequate technical expertise and poor management.

While Africa's energy sector has performed well below the standards of other less developed continents such as Asia and Latin America, the continent posses enormous untapped energy potential.  For instance, Africa has substantial hydropower potential but less than 4% has been harnessed.  Africa has an estimated proven geothermal potential of 9,000 MW and only approximately 45 MW has been exploited.  Africa has a great deal of untapped energy which if adequately tapped or exploited could help meet the growing energy demand as well as improve Africa's economic growth rate. 

Traditionally, public power utilities in Africa are monopolies.  There is a debate about how far this can account for the undeniable under-performance in the delivery of energy services, compounded by the substantial financial losses notched up by public power utilities.  It also appears that the highly centralized electricity industry constitutes an important barrier to the growth of more successful, cost-effective and sustainable decentralized power sector institutions.

The structural nature of the problems facing the power sector in Africa is now a priority issue for Governments, bilateral donor agencies and multilateral development banks and efforts to either implement or contemplate fundamental and far-reaching reforms of the power sector are now underway in most SSA countries through the now ubiquitous Structural Adjustment Programs (SAPs).  The process of structural adjustment involves, among others, economic liberalization that calls for freeing the market from state control and divestiture of public ownership in areas where the private sector is said to have a comparative advantage.  This is expected to lead to restructuring and privatization of the power sector which will require substantial inflows of private capital, professional and skilled manpower as well as technology (a prerequisite for the success of this process).  The private sector is expected to mobilize those resources from domestic and foreign sources.   On the other hand, some opponents of restructuring and privatization, argue that this could have negative implications for low income groups and rural communities and on strategic and national security issues of the power sector.  Some analysts question whether some of these reform processes that have been implemented in countries with big power systems (with capacities ranging between 10,000 to 50,000 MW) are suitable for African countries, most of which have relatively small systems.  Whether African countries can handle the regulation and co-ordination that comes with these systems is still another questionable issue. 

The main objective of this Workshop was to bring together representatives (energy policy-makers and researchers/analysts) from countries which have implemented some power sector reforms in Africa and those considering initiating the process of reform, to share their experiences and see how Africa can optimally utilize its immense power resources and how the sector can operate more efficiently.  The Conference brought together participants from Uganda, Kenya, Cote d’Ivoire, Ghana, Burkina Faso, Denmark, Zimbabwe and Mauritius.  A large number of utility representatives attended the meeting.  Utilities represented in the meeting included the following:-

-            Electricity Corporation of Ghana (ECG) - the second largest utility in Ghana that is in charge of distribution in the central and southern regions of Ghana

-             Energie Electrique de la Cote d’Ivoire (EECI) one the countries two principal utilities

-             Northern Electrification Department (NED) - a subsidiary of VRA, that is in charge of electrification in Northern Ghana

-           Volta River Authority (VRA), Ghana - the country’s largest utility

-           Ghana National Petroleum Corporation (GNPC) - Ghana’s main petroleum parastatal that is to implement a major gas-fired IPP at Tano (coordinators of this project attended the meeting)

-           Uganda Electricity Board (UEB)

-            Zimbabwe Electricity Supply Authority (ZESA)

The Cote d’Ivoire and Ghana country case studies offered various lessons to be learnt by other countries, since they have already implemented far-reaching reforms in their power sectors.  The two-day workshop also identified more workable, efficient and sustainable power sector structures for the different African countries.


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