Aug 24, 2017
According to a study, more than 5,000 jobs in the small and medium scale manufacturing sector were lost between 2012 and 2015 during Ghana’s worse and longest power crisis.
A Research Fellow at the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Dr Charles Ackah disclosed the findings in Accra when he presented a paper on the topic, “How did the 2012-2015 power crises affect small and medium manufacturing firms in Ghana?”
The power crisis, he emphasised, had an enormous adverse effect on manufacturing companies resulting in the reduction of labour productivity and total factory production.
According to the study, the power crisis led to a 10 percent fall in monthly productivity of the Small and Medium Enterprises (SMEs) located in the four top industrial clusters of the country; Accra, Tema, Sekondi-Takoradi and Kumasi.
Many SMEs in Ghana lost about GH¢250 million or 56.24 million dollars in the crippling energy crisis that hit the country.
The development, Dr. Ackah stressed could be direr if all the various SMEs numbering over 90,000 were taken into consideration.
“There are about 99,000 of such manufacturing firms in the country, so if you want to get the overall national loss, you need to do further estimates and check to see what GDP is lost,” DrAckah stated.
Even though the study did not establish that the power crisis locally known as ‘dumsor’ did have any ‘significant impact on labour,’ DrAckah, however, observed the findings did not suggest that the power crisis did not lead to job losses in the country.
“Our field work indicated that 4.4% of eligible firms had folded up in the six months between the completion of the first round of the Integrated Business Establishment Survey (IBES) and the field data collection for this study,” He said,
Also, another 18.5% of eligible firms could not be located. While we do not have information to attribute these exists to the power cuts, it is likely to be at least a contributing factor.”
The Research Fellow urged that critical investments be made in generation, production and distribution infrastructure to improve the reliability of power supply through the national grid to engender economic growth.
Out of the 1,244 eligible firms, 885 were surveyed; of the remaining 359 firms, 73 refused to participate in the survey, 55 had folded up at the time of the survey as well as 231 could not be located.
Prof. Robert Osei, Vice Dean of the Graduate School of the University of Ghana, said the only way the country could be developed was through improving the power situation and making it affordable.
“If you want to create jobs, develop the economy, you need to improve the power situation. The One District One Factory’ will not happen if you do not improve the power situation,” he said.
Executive Secretary of the Energy Commission, Dr Alfred Ofosu-Ahenkorah, observed that the report brings to the fore the critical necessity of energy in economic development.
“From what we have learnt from the presentation, the questions and everything, I am getting convinced that for economic development, we need energy that has the following four characteristics: it must be available, reliable, affordable and sustainable,” Ofosu-Ahenkorah asserted.
Source: Francis Tandoh/adrdaily.com