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Power crisis causes job losses

Sep 30
11:09 2014

Electricity supply challenges over the past few years have adversely affected the operations of processing, manufacturing, and mining companies -- leading to substantial job-losses as companies look to reduce their overhead costs.

Electricity, which constitutes about 20 percent of operation cost for processing and manufacturing companies, has remained unreliable -- leading to the loss of production time and equipment breakdown.

Most producers have had to rely on expensive diesel to power generating plants.

From over 105 timber processing companies in the country that employed about 100,000 people, there are now just 45 companies employing about 30,000 people, the Ghana Timber Millers Organisation (GTMO) said.

About 70,000 jobs in the timber processing sector have been lost over the last few years following the collapse of about 60 timber processing companies.

In the Ashanti Region, there remains only ten timber firms in operation out of an initial fifty. Many of the timber firms are reported to have been sold out for residential accommodation, fuel stations, or for hotel accommodation.

By Dominick ANDOH | B&FT Online | Ghana
The mining sector has also seen its fair share of job-losses as cost of operations soar due to erratic power supply.

Between January 2013 and March 2014, about 3,080 mine workers were retrenched as the result of a slump in gold prices and rising cost of operations --attributed to unreliable power supply.

Newmont Ghana is to lay-off about 472 of its mineworkers by the end of this month.

The mining giant announced the retrenchment of 600 staff in February, and said it aims to readjust expenditure to match a reduced mining rate.

An earlier retrenchment in 2013 saw around 240 workers of the company’s Ahafo Mine sent home.

Dr. Kwame Asamoah Adam, Chief Executive Officer of the GTMO, has warned that the timber processing industry faces imminent collapse, in five years, if steps are not taken to address the perennial power challenges facing the country.

“GTMO engages in selective logging and complies strictly with the laws governing the sector. We presently have a voluntary partnership agreement with the European Union and we can export only legally sourced lumber to that market.”

He warned that “any collapse will open the floodgates to illegal loggers, who will plunder our forest resources and massively degrade our lands”.

Ghana currently exports about 400,000 cubic metres of wood per annum and consumes 600,000 locally. The European Union (EU) is one of the biggest markets for timber products and has traditionally received about 60 percent of Ghana’s timber exports.

The utility sub-sector recorded the highest figure in price inflation rate at 75.8 percent, the August 2014 producer price index showed.

Continuously surging utility prices have pushed the producer price index up to a record high of 48.3%, the highest rate ever during a 12-month period.

This represents a 1.1 percentage point increase in producer inflation relative to the 47.2 percent rate recorded in July 2014.

The producer inflation in the utility sub-sector recorded the highest year-on-year producer price inflation rate of 75.8 percent over the July figure of 78.6 percent.

The hikes were followed by increases in January and July, causing power and water tariffs to jump by 96 percent and 72 percent respectively over nine months.

The country has been inundated with persistent outages due in part to the shortage in gas supply from Nigeria via the West African Gas Pipeline – lately, because of a strike action by petroleum and gas workers in Africa’s most populous nation.

Resumption of gas supply from Nigeria over the weekend led to a relatively improved situation.
ECG subsequently released a load-shedding timetable to guide consumers. Based on the time-table, consumers are to expect a 14 hours of power outage between 6am and 8pm local time during the days they are scheduled to go off.

Source; BFT

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