Ghana Not The Only Country In Africa Demonstrating Over High Electricity Tariffs

High electricity tariffs
Ghana’s West Africa Neighbor Ivory Coast is going through a form of civil unrest over electricity tariffs. The citizens there are protesting against high electricity prices. Initially peaceful, the protest turned violent in the town of Daloa in the Western part of Central Ivory Coast after protesters ransacked offices of the electricity company and police responded by firing tear gas. Similar protests have taken place in the administrative capital of the country, Yamoussoukro where protesters burned tires and set fire to a car belonging to the national electricity company (CIE) before they were dispersed by the police.

 

My checks show that the Ivorian Ministry of Energy had announced that the electricity tariffs were expected to rise early in the year to between 6 and 10%, but many consumers have received higher bills.

 

I am surprised at the turn of events because President Ouattara had announced on May 1, after the price increases, to end the monopoly of CIE to bring the prices down. The Ivorian President Alassane Ouattara had publicly asked CIE to review its tariffs to fight against high prices. However, the bills in the following months had a significant increase in prices.

 

The reaction of the Ivorian public has been one of anger and anguish with many blaming President Allasane Outtara for the hardships in Cote D’Ivoire.

 

The president of the Federal Union of Consumers in the Ivory Coast Jean-Baptiste Koffi, told the Media on Tuesday, “The government is responsible for the current social tension and protests in Yamoussoukro [and other parts of the country]. They should stop the increases in pricing to avoid the difficulties faced by consumers,”

 

I thought Ivorians would be happy with President Outtara’s achievements because I have sighted a World Bank report which states that electricity coverage in Ivory Coast is high by regional standards at almost 60 percent of the population and the country is a regular exporter to some neighbors. When I checked the records, I realized Ivory Coast already exports electricity to Ghana, Mali, Togo and Burkina Faso.

 

In his May 1, 2016 address to the Ivorians, President Outtara had boasted saying, “We not only have a little more electricity in abundance, but we also have electricity of good quality for the Ivorians and to also export to neighboring countries,”

 

But is President Outtara on course to win the battle for lower costs of electricity?
‘‘Our long-term goal has been to reduce electricity costs. We are not yet there but we’ll get there, “Ouattara reassured his country men and women.

 

The Ivorian government now aims to push the capacity to 4,000 MW by 2020. Exports to its neighbours have been declining in recent years as domestic demand has outpaced new power generation.

 

As an Energy watcher, I am intrigued by how applicable to their experiences is the insightful statement made by Jeff Immelt, the CEO of the American transnational company, General Electric, in an interview with the African Business Magazine of May, 2016. He said, “Without electricity, there will be no prosperity. It’s as simple as that.”

 

In the case of Cote d’Ivoire, available literature I have seen indicate that President Outtara has been working to improve its electricity generation capacity.

 

Currently, about 60% of the electricity is produced by thermal power stations while 40% is generated by hydropower plants. In its strategic plan 2013-2030 for the development of the electricity sector in Côte d’Ivoire, the Government identified 66 projects that will require massive investment from the private sector, including through PPPs with Independent Power Producers (“IPP”), to expand power capacity production and to modernize the transport and distribution of electricity throughout the country. Efforts are underway to increase hydroelectric and thermal electricity generation with construction of new hydroelectric dams (such as a 275-MW hydroelectric plant at Soubre) and thermal power plants as well as expansion projects at the CIRPEL and AZITO thermal power plants.

 

The Government’s efforts have not gone without being noticed by industry players and politicians
“[Cote d’Ivoire] has an outstanding power sector,” said Christophe Jacquin, regional head of operations for U.K. power generation group Aggreko, which operates a thermal power plant in Ivory Coast. “It is best in class in West Africa.”

 

Luc Ayé, Managing Director at Azito Energie, an independent power producer, says a key to success is a defined set of rules for how CIE [Ivorian Electricity Company] has to pay the independent power generators. A “waterfall” structure gives independent power producers a relatively high place in the payments queue.“That allows transparency in the sector and all the operators know that we are going to get paid. It is the basis for everything that has made Côte d’Ivoire attractive for investment. It has never been called into question,” Ayé says, adding: “There are very few countries that have such a clear organisation and structure.”

 

As Reuters recently reported, Ivory Coast’s electricity generation capacity has reached new highs of 2,000 megawatts, following the inauguration of a new thermal power plant. Ivory Coast’s electricity generation company, and CIPREL, a subsidiary of Emerging Capital Partners, recently completed a project to increase its total capacity by 234 megawatts (MW) to a total of 556 MW in a bid to meet fast-growing domestic and regional demand. The $382.15 million project, which includes a steam and a heat turbine has taken over two years for completion and makes CIPREL the country’s biggest independent producer of electricity.

 

It comes as a surprise that Ivorians will be turning against their own President who is reputedly to be leading their country in the right direction.

 

I have realized that protests against high prices of electricity are becoming a phenomena in the West African Region as a result of increased investments in oil-based thermal generation of electricity. It is indeed true as the popular saying goes “Nowhere cool”.

 

Recently in Ghana, The Trades Union Congress (TUC) and other organized labour unions such as the Ghana Medical Association (GMA) and the Ghana Registered Nurses Association peacefully demonstrated in the regional capitals demanding a reduction in utility tariffs and the scrapping of the Energy Sector Levies Act which increased fuel prices by almost 30 per cent.

 

In Nigeria, Organized labour and its civil society allies on February 1 made good their threat as protests against the new Multi-Year Tariff Order (MYTO2015) swept across the country, paralyzing activities at many electricity distribution companies in many cities.

 

From Lagos to Abuja, Kaduna, Ibadan, Enugu, Maiduguri, Owerri, Port Harcourt and indeed all major cities in all states of the federation, the protesters were unequivocal in their rejection of the tariff increase.

 

Elsewhere in Dakar — and in nearly a dozen other West African countries — most protesters have not been quite as restrained. Angered by sharply rising prices of basic foodstuffs, transport, electricity and other essentials, they have poured into the streets to express their frustrations and demand that their governments act quickly to halt the spiraling cost of living. Street barricades, burning tyres, arson and sometimes deadly confrontations with riot police have been common.

 

-The Gazette Newspaper