Assessing the Socio-Economic Impact of the Electricity Crisis in Ghana

Abstract

This study seeks to assess the socio-economic impact of Dumsor on the Ghanaian economy by exploring its effects on various sectors, identifying key challenges, and offering policy recommendations to mitigate future crises. The study adopted a mixed-methods approach, combining both quantitative and qualitative research techniques. This approach allowed for a comprehensive analysis of the impact of the electricity crisis on different sectors of the Ghanaian economy, businesses, and households. The quantitative analysis provided measurable insights into the extent of the crisis’s impact, while the qualitative analysis offered deeper understanding through interviews and case studies. The findings on the socio-economic impact of the electricity crisis, Dumsor, in Ghana indicate significant effects on various sectors of the economy. The analysis is drawn from data on households, small and medium-sized enterprises (SMEs), large industries, and essential service providers. Several socio-economic indicators such as income levels, employment, productivity, education, and health-were examined to assess the severity of the impact. The frequent power outages disrupted production processes, leading to reduced output, increased operational costs due to reliance on backup generators, and in some cases, business closures. SMEs, which contribute significantly to Ghana’s GDP, were disproportionately affected due to limited access to alternative power sources. Large industries, on the other hand, faced increased costs but managed to maintain production due to their ability to invest in generators. However, their overall output and profitability decreased by an estimated 25% during peak periods. For households, Dumsor led to an increase in expenses related to alternative energy sources like candles, batteries, and fuel for generators. The crisis also led to loss of productivity for home-based businesses and students who struggled with irregular power supply. A survey of 200 urban and 100 rural households revealed that 73% reported a decline in household income due to Dumsor, with urban households being more reliant on electricity-dependent businesses. It is recommended that, Ghana must prioritize investment in energy infrastructure, focusing on both expanding capacity and maintaining existing facilities. This includes the development of renewable energy sources, such as solar and wind, to diversify the energy mix and reduce dependence on traditional sources like hydroelectric and thermal power. Strengthen governance and regulatory frameworks in the energy sector is crucial. Transparent and effective regulation is needed to ensure fair pricing, efficient energy delivery, and accountability from power generation companies. Policy reforms should also encourage private sector investment and partnerships in the energy sector. Finally, the government should promote renewable energy as a sustainable solution to the country’s power challenges. Incentives for households, businesses, and industries to adopt solar panels and other renewable technologies can help reduce pressure on the national grid and ensure a more reliable power supply.