The policy think tank Africa Policy Lens (APL) has rejected the Mahama government’s claim that upward adjustments in utility tariffs, just announced, were made directly necessary by International Monetary Fund conditionalities, imposed when the Akufo-Addo administration sought a US$3 billion bailout from the Fund.
Reacting to the recently announced tariff hikes and their justification, the think tank said that attempts by government functionaries to blame the IMF are untenable.
It argued that an increase in utility tariffs is not a direct quantitative performance criterion or an indicative target under the IMF programme.
“Conditionalities by the IMF did not start with the NPP government,” a statement by the think tank said. “It is also not true that the $3 billion bailout sought by the Akufo-Addo administration had increases in utility tariffs as one of its quantitative or indicative targets, even though the programme expects the energy sector to operate efficiently.
“This government must accept responsibility and stop blaming the previous administration.”
Making the burden lighter
APL recalled that when the first New Patriotic Party government of Nana Addo Dankwa Akufo-Addo was sworn into office in 2017 and began renegotiating the terms of the IMF programme entered into in 2015 by the National Democratic Congress government of John Dramani Mahama, there were pre-existing conditionalities by the IMF which aimed to boost revenue generation and cut down on expenditure, and not only in the energy sector.
“Notwithstanding the expectations of the IMF, the Akufo-Addo government rather reduced utility tariffs, including that of electricity, to reduce the burden on the people,” APL said.
“There is always a choice to be exercised by the government and if this current government has decided to use the easy way out of the situation, they should wholly accept that as their decision and not seek to blame the previous government,” the think tank’s statement said.
“The data below depicts increases/reduction in electricity tariffs under the NDC (from 2009 to 2016) and NPP (from 2017 to 2024). It is instructive to note that both political regimes experienced IMF programmes in their first and second terms,” APL further said.
Under NDC
2009 – nil
2010 – 89% increase
2011 – 10% increase
2012 – 7.42% increase
2013 – 58.9% increase
2014 – 28.35% increase
2015 – 90.93% increase
2016 – 10% increase
Under NPP
2017 – nil
2018 – 17.5% reduction
2019 – 17.46% increase
2020 – nil
2021 – nil
2022 – nil
2023 – 51.02% increase
2024 – 6.47% increase
Between 2009 and 2016 NDC governments pushed through a cumulative percentage increase in electricity tariffs of 294.6%, which translates into an average annual increment of 36.8% in the cost of electricity over those eight years of the NDC in power.
The NPP, on the other hand, authorised a cumulative percentage increase in electricity tariffs of 57.45% – an average annual rise of 7.2%.
The think tank also noted that at the same time as electricity tariffs increased astronomically under the NDC, Ghanaians were living in dumsor.
Under the Akufo-Addo-Bawumia government, electricity prices registered minimal increases and there was a corresponding steady and reliable supply of electric power, according to APL.
Today, the think tank stressed, the NDC government which promised to reduce the cost of living for Ghanaians has, in its first four months in office, hiked electricity tariffs by 14.75%. Coming events, it said, cast their shadow.
“Let this not be blamed on any IMF programme because the data above shows that under the same IMF programmes, the NPP managed the electricity tariffs better,” the think tank said.
“In effect, the IMF is not to blame for these hikes in utility tariffs. Government should solely be held accountable for them,” APL concluded.
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