The government should involve the private sector in the distribution end of the energy value chain, Policy Lead on Climate Change and Energy Transition at the Africa Centre for Energy Policy (ACEP),Mr Charles Ofori, has suggested.
“We believe private sector participation in a transparent manner and on the basis of merit and not just a person’s affiliation to a party or the other would be essential and improve revenue generation in the sector,” he said.
Mr Charles Ofori gave the advice during a budget forum in Accra last Thursday organised by the Natural Resource Governance Institute (NRGI) ahead of the 2022 Mid-Year Budget Review.
It was organised in collaboration with civil society organisations(CSOs) to discuss issues on energy and mining, health, and education.
Mr Ofori said it was critical to address the inefficiencies in the distribution end of the energy value chain, because it was critical for revenue generation.
He said the inefficiencies in the energy sector caused the decline in oil and gas production in 2018, indicating that delays in negotiations on the 2018 Bid and Licensing Round had implications on oil and gas investments.
“Government is fiscally facing some constraints currently and has options to invest in the technology, machinery and equipment’s in order to reduce technical and commercial losses in the energy sector,” Mr Ofori stressed.
Mr Ofori stated that, there had been debt accumulation in the energy sector and that could be blamed on the distribution end of the value chain.
“Commercial and Distribution losses do not allow a recovery of the cost incurred because of that it is unable to pay off the debt along the value chain,” he said.
He emphasised that there was the need for the government to put in place appropriate measures to safeguard the sectors’ viability.
Mr Ofori observed that financial viability at the distribution end was established would improve profitability of the energy sector.
“Government has to primarily solve the fundamental challenge and ensure that the distribution end of the value chain is robust enough to recover all the cost,” he stressed.