Water, electricity and sanitation make up Ghana’s utilities sector. Telecom services are addressed in a separate article. Since the early 1990s, the government has undertaken reforms including the restructuring and privatization of the utilities sector. Previously the sector suffered from neglect as tariffs were kept lower than the real cost of doing business and government was unable to adequately fund these essential services. Independent regulatory agencies have been established to oversee utilities and facilitate a fair and transparent business environment. Private sector participation and decentralization of rural water and sanitation services have encouraged competition and user participation. Investment in both the maintenance and expansion of infrastructure is needed across the utilities sector. Opportunities exist for a wide range of suppliers and service providers.
Water
It is estimated that 51% of Ghana’s population has access to treated water. Water services are currently supplied to Ghana’s urban areas by the Ghana Water Company Limited (GWCL) which is solely owned by the state. GWCL is responsible for providing water services to around 87 cities and towns. Rural water supply is overseen by the Community Water and Sanitation Agency (CWSA). District Assemblies are responsible for management of local water supply including initial investments, operations and maintenance. Ghana’s rural water sector consists of over 287 small towns and over 16,000 rural communities. Among rural populations, an estimated 44% have access to water supplies. In urban areas, the percentage is believed to be around 61 percent. 2
GWCL’s water systems require both extensive maintenance and expansion. As stated in the Government of Ghana’s 2007 Water Policy: “The GoG [Government of Ghana] is determined to halt the falling trends in water supply coverage and quality and resume a programme of expansion and improvement. This requires consistent high levels of investment from public and increasingly, private (local and foreign) sources. Water has been identified by the Government of Ghana as a vital building block for eliminating poverty and is linked to achieving all eight Millennium Development Goals. It is hoped that all Ghanaians will have access to potable water by 2020. 4 Private sector partnerships are essential to achieving these goals.
Presently Ghana is undertaking a $120 million USD urban water sector project. Funded by the World Bank, the Nordic Development Fund and the Government of Ghana, this project is known as the Ghana Urban Water Project. Seventy-three percent of the funds will be used for network expansion and rehabilitation. The government formed Ghana Urban Water Limited in June 6th, 2011 to take over the management of urban water systems in the country. It was to be a twelve month temporary plan but they continue to manage the urban water sytem.
Within the water sector, investment in infrastructure is needed, both to extend the water network and increase network reliability in poor areas. The Government of Ghana is currently seeking $460 million for the Kpong and Weija water works, which will supply uninterrupted water to the capital, Accra, and its sister city, Tema.7 Opportunities exist for companies with expertise in establishing point sources (boreholes or wells), providing water tanker services, economical water treatment systems, small town piping systems, and rain harvesting plants.3
Sanitation
Local government institutions, district and municipal assemblies, are responsible for the implementation of sanitation programs. Some of Ghana’s bigger cities, Accra, Tema, Kumasi, and Takoradi, among others, have conventional sewer networks and waste treatment facilities. The majority of other urban centers utilize on-site systems including VIPS and septic tanks. The waste is then transported by tankers to treatment facilities or landfill site by private companies or local government waste management departments. Because sanitation is organized through local assemblies, access to sanitation services varies greatly. In Accra, it is estimated that 65% of households have access to adequate sanitation, while less than 20% of households in the Northern city of Tamale do.
Government sanitation policy has focused on increasing access to adequate sanitation. By the year 2020, they hope to see the percentage of the population with access to domestic toilet facilities rise from 40% to 90% with the remaining 10% having access to hygienic public toilets. Ghana’s Environmental Sanitation Policy outlines three vital elements:
- Provision of adequate services using appropriate technology,
- Increased private sector participation, and
- Financial and technical sustainability of services provided to promote the economic and social well-being of the population of Ghana
Challenges currently facing the sanitation industry include difficulty acquiring land for landfill sites, a lack of recycling facilities and a recent shift from local government funded sanitation services to services funded through residents paying collection fees to contractors directly. 8 Like water, improved sanitation is directly linked with eliminating various public health concerns and therefore has the attention of both government and international funding organizations.
Opportunities exist throughout the sanitation sector from repairing and expanding sewer systems to new technologies for treating waste more efficiently and development of a recycling industry.
Electricity
Electricity in Ghana is provided by two state-run utilities, the Volta River Authority (VRA) and the Electricity Company of Ghana (ECG). VRA is responsible for power generation and has a total installed electricity generation capacity of 1,860MW. 9 VRA operates two hydroelectric plants, a combined cycle thermal plant as well as a thermal plant which is a joint venture with a company from the United Arab Emirates. In addition to supplying Ghana with electricity, VRA exports power to Togo, Benin and Cote d’Ivoire. The Northern Electricity Department , which is part of VRA, is the sole distributor of electricity in the Brong-Ahafo, Northern, Upper East, Upper West and some part of the Ashanti and Volta Regions. 10 The Electricity Company of Ghana (ECG) is solely responsible for the distribution of electricity in Southern Ghana.
Ghana’s total energy production does not meet demand and the country has become dependent on energy imports. In 2008, 9.148 kilotonnes of energy was used within Ghana. Of this sum, 5.8 percent was generated through hydroelectricity, 22 percent from imported crude oil used by Ghana’s oil refinery and for electricity generation and 72.2 from wood fuel used mostly by Ghana’s rural population. 11 In 2006, the electricity production deficit led to electricity rationing which was harmful to Ghana’s business environment. To avoid electricity rationing in the future, the Government of Ghana is undertaking a program of energy sector expansion. Government seeks to expand and diversify current electricity generation capabilities.
To meet the Millenium Development Goals, Government’s goal is to bring access to electricity within the country from 60% to 100% by the year 2020. The following strategic targets have been set to meet these goals:
- Achieve 15% penetration of rural electrification by complementary decentralized renewable energy by 2019 and expanding to 30% by 2020.
- Reduce the average electricity intensity per urban household by 50% by 2020. 3
- The development of the renewable energy industries such as biofuel, wind and solar have been a main focus of government. It is expected that a renewable energy law will be passed by parliament by the end of 2010. 11
Opportunities for investment in the electricity sector range from putting up street lighting to building solar panel plants. Companies able to assist in improving efficiency and coverage are being sought. Opportunities exist for companies able to provide alternative decentralized sustainable energy systems that can more easily reach Ghana’s remote and deprived rural communities.
Conclusion
In conclusion, Ghana’s utilities sector has great potential for growth, and opportunities exist for companies skilled at supplying these most essential services. Investment in this sector directly facilitates poverty reduction, fights disease and improves living standards. Government understands the needs of business and, through the creation of independent regulatory institutions, is determined to insure that investments in the utilities sector benefit both Ghanaians and business.