IEA urges government to reduce taxes on renewable energy to combat ‘Dumsor’
The Institute of Economic Affairs (IEA) has called on the government and parliament to implement policies that make alternative power sources more affordable and accessible for Ghanaians.
Among the key recommendations are tax reductions on renewable energy technologies such as solar panels and solar-powered portable lights.
“Tax reductions on renewable energy would not only provide immediate relief to affected households and businesses but also promote long-term energy security,” Samuel Manu, Head of the Survey Centre, IEA has said.
The call follows the release of a recent survey conducted by the IEA, highlighting the severe impact of power instability on the economy and daily life.
The survey, which gathered responses from 82 small and medium-sized enterprises (SMEs) and 83 households in the Greater Accra Region, found that an overwhelming 94% of respondents experienced multiple power outages between May 6th and May 12th, despite recent government assurances that the era of dumsor was over.
The findings indicate that the average respondent endured power outages approximately four times a week, with a significant portion reporting outages lasting seven or more hours each time. This situation has led to substantial financial losses and damage to electrical appliances for both businesses and households.
Samuel Manu, Head of the Survey Centre at IEA, emphasized the urgency of finding a sustainable solution to Ghana’s recurring power issues. “The ongoing power crisis has dire consequences for small and medium-sized businesses, which are the backbone of our economy. These enterprises, unlike larger companies, often lack the capital to invest in alternative power sources or relocate to more stable regions,” he stated.
The survey results reveal that 89% of households and 58.5% of SMEs do not have access to any alternative sources of power, underscoring the high dependence on the national grid. This reliance exacerbates the impact of outages, leaving many without viable options during periods of power cuts.
Additionally, the IEA calls for improved communication from the Electricity Company of Ghana (ECG) regarding outage schedules and reasons for power cuts. The survey indicated that 95% of respondents do not receive advance notice of power outages, complicating their ability to plan and manage their activities. The IEA proposes leveraging the ECG’s digital Power App to disseminate this critical information effectively.
The IEA’s recommendations come at a time of growing frustration among Ghanaians over the inconsistency between government assurances and the reality on the ground. Nearly half of the survey respondents expressed uncertainty about when the power crisis would end, with some fearing it might never be resolved.
“The situation demands immediate and decisive action from all stakeholders,” Manu concluded. “We need a coordinated effort that involves the government, the energy sector, and political parties to create a roadmap for a lasting solution to Ghana’s energy challenges.”
