By The ongoing erratic power supply has led to nearly 70 percent reduction in the daily productive capacities of Small and Medium Enterprises (SMEs) in the Central Region.
According to the Ghana Chamber of Commerce and Industry (GCCI), regular checks and daily feedback from members indicate that over 5,000 SMEs are facing severe economic hardships.
Mrs. Benedicta Anita Mensah, the Regional Manager of GCCI, expressed concerns over the detrimental effects of the power crisis on SMEs. While she couldn’t immediately provide statistics to quantify the cost of the crisis and job losses, she lamented its profound impact.
She noted that the frequent power outages, commonly known as “dumsor,” have crippled businesses, resulting in significant losses of productivity, revenue, increased operational costs, and damage to electronic infrastructure.
She pointed out that the added expense of investing in costly alternative energy sources like generators was further crippling businesses financially. She warned that if not promptly addressed, this situation could result in the closure of both local and multinational enterprises.
“The current energy situation is crippling businesses and creating unemployment — a twin situation that could lead to a national disaster.
“The energy situation has hit us hard. It is not an ideal situation and making the cost of production very high and productivity very low.”
“Many businesses are spending more money on energy now so how do we sustain jobs, expand and grow our businesses,” she wondered in dismay.
She highlighted that barber shops, tailoring shops, hairdressing salons, and cold stores were among the hardest hit, as many of them couldn’t bear the cost of purchasing generators or alternative energy sources.
Even for those capable of affording such investments, she emphasized that the exorbitant prices of fuel were significantly impacting their operations, posing an unsustainable situation in the long term.
Expressing regret, she noted that the SME sector was already burdened with numerous high taxes and licensing regimes, which were further stifling businesses.
“After recovering partially from the wrecks of the COVID-19 pandemic, one least expected the current power rationing conundrum to further deepen the woes of SMEs.”
Mrs. Mensah cautioned that failure to promptly resolve the power crisis could lead to severe socio-economic consequences. She emphasized that Ghana, which had previously made strides in boosting SMEs through initiatives like the African Continental Free Trade Area (AfCFTA), could face setbacks.
The AfCFTA aims to establish the largest free trade area in Africa, uniting 1.3 billion people across 55 countries with a combined Gross Domestic Product (GDP) valued at US$3.4 trillion.
“The AfCFTA provides an opportunity for them to access regional export destinations and use the African regional market as a stepping stone to expand and graduate to overseas markets,” she explained.
Looking ahead, Mrs. Mensah stressed the urgency for the government to take decisive action and provide immediate solutions. She highlighted the need for consistency and transparency in the communication from the Electricity Company of Ghana (ECG) to address this pressing issue effectively.
Additionally, she advocated for supporting SMEs with flexible tariff regimes and implementing flexible solar-powered systems to ensure the sustainability of their businesses.
“In light of these developments, we are urgently calling on the government to implement immediate measures to mitigate the impact of the frequent power outages.
“Alternatively, if such interruptions are unavoidable, a clear and reliable schedule must be provided to enable businesses to plan effectively, fostering a more conducive operational environment,” Mrs Mensah said.
