Ken Ofori-Atta doles out GHS1.2 billion to ECG, GWCL as part payment for free water, electricity
The immediate-past Minister of Finance and Economic Planning, who has once again been designated for the same position, Ken Ofori-Atta, has so far released at least GHS1.2 billion as part payment for COVID-19 relief covering the free electricity and water supplied to Ghanaians since the outbreak of the pandemic.
The free electricity and water is two of the many social interventions rolled out by the government to cushion Ghanaians against the hardships imposed by COVID-19.
To ensure that many Ghanaians do not suffer disconnection because of their inability to settle their electricity bills in the midst of the pandemic, at least GHS1 billion has been released to the Electricity Company of Ghana (ECG) as part payment for the free power it supplied to the public upon the instruction of President Nana Addo Dankwa Akufo-Addo.
In the same vein, the part payment made to the Ghana Water Company Limited (GWCL) for providing free water to the general public since the outbreak of COVID-19 is in the region of GHS180 million.
Finance Ministry sources indicate that the total amount budgeted by the Ministry of Finance and Economic Planning for the provision of free electricity and water is at least GHS1.8 billion
Deviation of GHS632 million
This means that the Finance Ministry has to cough up a balance of more than GHS632 million if the budgeted amount tallies with the final invoices to be raised by the two utility service provider.
However, in the event that the final bill from the two utility companies exceeds the over GHS1.8 billion budget, the government would have to look for the additional money to pay.
The massive decline in government revenue
Government is making all these expenditures despite a massive drop in revenues, including a significant decline of $1.6 billion in crude oil export receipts on the back of low prices.
As a result of the impact of COVID-19, the GHS47,253.95 million Ghana Revenue Authority GRA was tasked to collect was revised to GHS42,769.50 million in the mid-year budget review.
At the end of the year, GRA, with the support of Mr Ofori-Atta, implemented initiatives that resulted in the collection of GH₵45.3 billion (GH₵45,338.69 million), indicating that the original target was missed by over GH₵1.9 billion (GH₵1,915.26 million).
Despite the sharp decline in revenues, Mr Ofori-Atta continues to find the resources to help the country battle the pandemic.
Free electricity – April, May, June 2020
When the pandemic hit Ghana, President Akufo-Addo, in a compassionate move during the lockdown, absorbed the bills of low-income consumers of electricity in the country for April, May and June 2020.
The remaining consumers who fall outside of this category enjoyed a 50% reduction in the cost of electricity for the same period.
The President disclosed this in his sixth national address to the nation on the novel coronavirus on Thursday, April 9, 2020.
Free water – April, May, June 2020
The government also absorbed the water bills for all Ghanaians for April, May and June 2020 following an increase in the country’s coronavirus cases amidst a partial lockdown of the epicentres of the disease.
Free water, electricity extended
When he presented the 2020 Mid-Year Budget to Parliament, Finance Minister Ofori-Atta announced the extension of free water and electricity supplies to consumers.
Free water extended for three months
The period for free water, which ended in May 2020, was extended for additional three months.
Free electricity extended for six months
Free electricity was extended for six months to make sure the ordinary Ghanaian continued to enjoy free electricity and water while the government tackled the virus.
“It takes a caring government of the people, and with that, I mean, a government of all the people, to offer cost-free water to all across the country: representing all domestic and commercial customers in Ghana for three months.
“It takes a caring government to be for the people and for business, large and small, to choose to subsidise electricity consumption by 50% to 4,086,286 households and 686,522 businesses at a cost of GHS1.02 billion in three months,” Ofori-Atta told parliamentarians.
Free water extended to December 2020
On September 23, 2020, President Nana Addo Dankwa Akufo-Addo extended the free water package in the wake of coronavirus disease (COVID-19) to the end of the year.
Free water, electricity for lifeline consumers from Jan-March 2021
On Sunday, January 3, 2021, President Akufo-Addo, in his 21st COVID-19 update to the nation, extended free provision of water and electricity for lifeline customers by three more months.
He said lifeline electricity consumers and households whose water usage do not exceed five cubic metres per month will not pay for the utilities in January, February and March 2021.
“Government will, thus, continue to pay the electricity bills for our nation’s one million active lifeline customers for the next three months, i.e. January, February and March.
“Additionally, all one million, five hundred thousand customers of the Ghana Water Company whose consumption is not more than five cubic metres a month, will not pay any bills for the next three months, i.e. for the months of January, February and March. This relief package will be reviewed at the end of March”, President Akufo-Addo said.