Ghanaians must realise and accept the fact that the days of cheap power are a thing of the past, Dr. Kwabena Donkor, Chairman of the Parliamentary Select Committee on Mines and Energy, has said, agreeing with power utilities that tariffs must be set to cover costs. Ghanaians, he said, have been “extremely inefficient†in their use of power, largely because it has been historically cheap. “The nation must realise that the days of cheap power are no more. So, going forward we have to be efficient in the use of power. Both the Energy Foundation and the Energy Commission must intensify public education aimed at driving efficiency in power usage,†the Member of Parliament for the Pru East Constituency told the B&FT in an interview. The so-called historically cheap power refers to power from the Akosombo hydroelectric dam, for which the Volta River Authority (VRA) is still paid 4 cents per kilowatt hour, a figure considered too cheap. The VRA is proposing an increase to 9.2 cents per kilowatt hour to bring it close to recovering it costs, especially because it is increasingly moving to thermal power generation which is considered far more expensive. Gas, which could have brought down the cost of thermal power generation, has been missing in the generation mix since the West Africa Gas Pipeline was damaged in August 2012. According to the VRA, the country needs some 300 million standard cubic feet of gas a day, none of which is currently available, to replace the use of crude oil in thermal power generation. “In 2011, when we had gas, for the whole year we purchased about US$200million of crude oil. Now in 2013, when we have no gas, in the first five months of the year -- not even half of the year -- we purchased US$300million, but the tariffs have not changed. The exchange rate has gone down by about 30%, the price of crude oil is more than US$100; that’s the problem,†Chief Executive of the VRA Kwaku Awotwi told the B&FT recently. The MP agreed with the VRA, saying: “We are running the VRA down with such unrealistic tariffs.†A national consensus, according to Dr. Donkor, who is also a former Deputy Minister of Energy, has to be built on the fact that whatever tariff is established must cover the cost of generation. “A former minister in this country once said that affordability is the language of the opposition. In opposition, he preached affordability from the rooftops. Three months after becoming a minister, he said affordability is the language of the opposition, which means there is a certain realistic centre-ground, and that centre-ground must be populated by all political parties. That is where the national consensus has to be,†Dr. Donkor said. In reaching a consensus on the cost of power generation vis-à -vis the tariffs that have to be paid, the MP threw a challenge to the Public Utilities Regulatory Commission (PURC) to independently calculate the cost of generation. “I believe we must not just accept the cost the utilities claim. PURC must have a mechanism of not just auditing but also calculating the cost of generation and comparing their conclusion with what the utilities are saying. Once the PURC ascertains the cost of generation, then we must cover that cost of generation.†The power utilities, including the Volta River Authority, the Electricity Company of Ghana and the Ghana Grid Company, have put in an application to the PURC calling for more than 200% tariff increments in view of what they say has been the increasing cost of generation. Although the PURC is yet to fully consider their application, indications are that any review could be substantial, even as consumers -- both domestic and commercial -- have kicked against an increment in tariffs. The last such review occurred three years ago, leading to an increase of 89% in electricity tariffs. By Basiru ADAM
The Ghana Revenue Authority (GRA) has begun a nationwide “distress action†to recover approximately GH¢2.7million from 24 tax-defaulting firms in the Greater Accra Region, Commissioner-General, George Blankson, has disclosed. The GRA’s Debt Management and Compliance Enforcement Unit is currently collaborating with offices throughout the country to seal off the premises of these companies to recover all tax arrears owed to the state. The exercise will retrieve all outstanding tax arrears owed to the state between 2005 and 2012. It also marks the beginning of a comprehensive programme of enforcement actions to recover all outstanding tax arrears nationwide, especially as Government is battling a shortfall in tax revenues. Mr. Blankson told journalists at a news conference in Accra before the start of the distress action that “our preferred, and indeed first, option in the recovery of debts is communication by telephone, through visits or in writing to get delinquent taxpayers to comply; because as much as possible we want taxpayers to continue in business, and even grow, so that they pay their current tax arrears and pay more taxes in future.†He explained that the defaulting taxpayers have for several months and years failed to pay or make satisfactory arrangements to defray their indebtedness to the Authority. “We have no other choice than to fall on the provisions of the tax law to recover these outstanding arrears through hard enforcement actions. It is only when the soft approach fails that we can fall on hard enforcement actions as a final resort. It becomes our painful duty to levy a distress warrant or seal off premises in extreme situations,†he said. At the start of the distress action, the GRA sealed off two premises: PH Hotels, located at East Legon, for defaulting on taxes amounting to GH¢314.145.55; while the second firm, AFWest Security also located at East Lagon, was closed down for owing GH¢187,678 in taxes. The management of Mensvic Grand Hotel, whose premises were visited by the enforcement team, promptly paid the amount of GH¢48,159 they owed.Government has projected in its 2013 budget statement that revenue from taxes will amount to GH¢17.1billion, representing 19.3 percent of Gross Domestic Product (GDP). Taxes on income and property were estimated at GH¢7.8billion, accounting for 45 percent of total tax revenue. The budget also forecast a fiscal deficit of GH¢8billion (9 percent of GDP), but early signs of revenue underperformance -- which threatens the deficit goal -- have led to stronger efforts to boost tax collections and close loopholes in the system. President John Mahama has also made significant changes to the leadership of the divisions and sub-divisions of the GRA to improve the Authority’s performance. By Ekow Essabra-Mensah
The Volta River Authority (VRA) says it is expecting the equipment manufacturer of the Aboadze T3 thermal plant to arrive in the country by Saturday, to assess the cause of the “overheating†that occurred in Turbine Four of the installation. The overheating, which led to an explosion, necessitated a precautionary shutdown of the four-turbine plant inaugurated two months ago to produce 132 megawatts of power. The Electricity Company of Ghana (ECG) -- the distributor in the three-entity power production chain -- after a stakeholders’ meeting with the VRA and GridCo, has agreed to shed 230 megawatts this week as a result of the development. “We are waiting for the equipment manufacturers to come and assess the situation; and if we are given the all-clear, then the three other turbines will come on-stream. In that case, we will only lose 20 megawatts from the shutdown of Turbine Four,†Samuel Fletcher, the Corporate Communications Manager of the Authority, told the B&FT. “The cooling system might have failed, and this led to the over-heating within the system. This occurred in Turbine Four and an explosion happened. The three other turbines and the steam engine were shut down as a precautionary measure,†he said. The country had to resort to an emergency power-rationing programme as a result of the destruction of a section of the West African Gas Pipeline last year, which cut 200 megawatts of power from the privately-run Asogli plant that relies solely on gas supply from sub-regional pipeline. The West Africa Gas Pipeline Company (WAPCo), which promised the resumption of gas supply by the end of April, failed to deliver -- due to what it said were contractual challenges and defects with machines cleaning the pipeline. At the best of times, even before the breakdown of the pipeline, WAPCO has provided only about 40 to 60 percent of the contractual volume, estimated at some 123 million cubic feet of gas. One of the units of the Bui Hydro Project was brought on-stream last month to generate 133 megawatts of electricity. B&FT has however been told that the project generates 90 megawatts of electricity between 6pm and 10pm each day, after which the plant must be turned off in order to maintain enough water supply for future generation. As the hydropower potential of the country appears to be running out, there is an increasing emphasis on gas for electricity generation. The country currently demands 300 million cubic feet of gas per day, but none of this is available. Ghana’s own gas supply, according to analysts, is not expected to come on-stream until next year, though Government had estimated to have gas before the end of 2013. By Dominick ANDOH
The elimination of fuel subsidies in Ghana will result in credit-positive fiscal savings, Moody’s analyst Edward Al-Hussainy has said, according to a report by Bloomberg. The assistance accounted for 4.15 percent of government spending last year as the West African nation struggled to narrow a budget gap that soared to 12.1 percent of gross domestic product by the end of 2012 following a presidential election, the ratings agency said. Ghana’s national petroleum company raised fuel prices on June 1, completing a fuel subsidy reform that began in February. Gasoline prices have increased by more than 24 percent this year, according to Moody’s. At the same time, Moody’s expects the budget deficit to remain elevated at 10 percent of GDP this year due to high wage and interest costs. The wage bill may reach 9 percent of GDP, down from 9.3 percent in 2012, the report said. Interest payments are forecast to rise to about 3.6 percent of GDP from 3.4 percent in 2012. Finance Minister Seth Terkper said in an interview last month the government wants to reduce the wage bill to between 30 percent and 35 percent of tax revenue by 2015. Salaries accounted for 72 percent last year, according to budget data. Bloomberg
Butternut squash, a vegetable crop, which is grown in the Upper East, Upper West and Northern regions is now being considered as an economic crop. Farmers, who cultivated the crop along the banks of the Black Volta River in the Lawra District of the Upper West region during the last dry season, earned not less than Gh¢ 7,000.00 each at the farm gate, Mr. Sadat Alhassan, Chief Executive Officer of Plus One Investment Limited, said at Wa at the weekend. He was speaking at a Butternut squash food bazaar, organized by Plus One Investment Limited, a Food Processing company, to promote the cultivation and consumption of butternut squash and its products. Mr Alhassan said the seed of the crop and its products are believed to contain medicinal properties that could cure certain fatal diseases like prostate cancer.He said the cultivation of the crop was being promoted by Plus One Investment Limited and the Ministry of Food and Agriculture with the Savannah Accelerated Development Authority (SADA) as the facilitating agency. Mr. Alhassan asked farmers in the three regions to increase production of butternut so that they could reap the economic benefits of the high demand of the crop in Europe. Dr Ephraim Avea Nsor, the Upper West Regional Minister, noted that 41,000 hectares had been earmarked for the cultivation of the crop this year. He appealed to more farmers living along the banks of the Black Volta River to cultivate the crop to improve their incomes. Mr. Joseph Faalong, Upper West Regional Director of Agriculture, said butternut squash had high nutritional value adding that farmers in the Lawra and Jirapa districts of the region had been empowered to cultivate the crop for export. Various food products prepared from the crop were served at the bazaar.
Some 870 million people were still hungry in the world in 2010-2012, a new FAO report has declared. The FAO’s flagship annual publication “The State of Food and Agriculture (SOFA)†-- Food systems for better nutrition -- notes that although some 870 million people were still hungry in the world in 2010-2012, this is just a fraction of the billions of people whose health, well-being and lives are blighted by poor nutrition. Two billion people suffer from one or more micronutrient deficiencies, while 1.4 billion are overweight, of which 500 million are obese, according to SOFA. Twenty-six percent of all children under five are stunted and 31 percent suffer vitamin A deficiency. The Director-General of the Food and Agriculture Organisation (FAO), Jose Graziano da Silva, denounced the huge social and economic costs of malnutrition and said the FAO’s message is that we must strive for nothing less than the eradication of hunger and malnutrition. Jose Graziano da Silva has subsequently called for resolute efforts to eradicate malnutrition as well as hunger from around the world. He made these remarks marking the launch of FAO’s flagship annual publication “The State of Food and Agriculture (SOFA)â€, where he said that although the world has registered some progress on hunger, one form of malnutrition, there is still “a long way aheadâ€. The cost of malnutrition to the global economy in lost productivity and health care costs are "unacceptably high" and could account for as much as 5 percent of the global gross domestic product -- US$3.5trillion dollars, or US$500 per person. That is almost the entire annual GDP of Germany, Europe's largest economy. In social terms, child and maternal malnutrition continue to reduce the quality of life and life-expectancy of millions of people, while obesity-related health problems such as heart-disease and diabetes affect millions more. To combat malnutrition, SOFA makes the case that healthy diets and good nutrition must start with food and agriculture. The way we grow, raise, process, transport and distribute food influences what we eat, the report says, noting that improved food systems can make food more affordable, diverse and nutritious. Specific recommendations for action include the use appropriate agricultural policies, investment and research to increase productivity -- not only of staple grains like maize, rice and wheat, but also of legumes, meat, milk, vegetables and fruit which are all rich in nutrients. Others are: 1) cut food losses and waste, which currently amounts to one-third of the food produced for human consumption every year. That could help make food more available and affordable as well as reduce pressure on land and other resources. 2) Improve the nutritional performance of supply chains, enhancing the availability and accessibility of a wide diversity of foods. Properly organised food systems are key to more diversified and healthy diets, it notes. Other recommendations include helping consumers make good dietary choices for better nutrition through education, information and other actions, and improve the nutritional quality of foods through fortification and reformulation. Make food systems more responsive to the needs of mothers and young children. Malnutrition during the critical ‘first 1,000 days' from conception can cause lasting damage to women's health and life-long physical and cognitive impairment in children. Giving women greater control over resources and incomes benefits their and their children's health, the report says. Policies, interventions and investment in labour-saving farming technologies and rural infrastructure, as well as social protection and services can also make important contributions to the health and nutrition of women, infants and young children. Projects that have proved successful in raising nutrition levels include enhanced production, marketing and consumption of local vegetables and pulses in East Africa; promotion of home-gardens in West Africa; encouragement of mixed vegetable and animal farming systems together with income-generating activities in some Asian countries; breeding staple crops such as sweet potatoes to raise their micronutrient content; and public-private partnerships to enrich products like yoghurt or cooking oil with nutrients. Making food systems enhance nutrition is a complex task requiring strong political commitment and leadership at the highest levels, broad-based partnerships and coordinated approaches with other important sectors such as health and education, according to SOFA. "A great many actors and institutions must work together across sectors to more effectively reduce under-nutrition, micronutrient deficiencies, overweight, and obesity," the report says. "Food systems governance that is providing leadership, coordinating effectively and fostering collaboration among the many stakeholders, is a first priority," the report adds. By Konrad K. Djaisi
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