Abstract

Ghana's 1992 Constitution is the penultimate legal reference for decision making in the energy sector. In addition, a number of laws, policies and guidelines have been developed to manage activities within the sector. These notwithstanding, it has been recognized that power relations between state institutions is the principal influence on decision making in the energy sector of most developing countries. To this end, we examine decision making in the energy sector through the application of political settlement framework developed by Mushtaq H. Khan. We find that the energy sector is ineffective in implementing and enforcing decisions taken due to the uneven distribution of power across institutions. In addition, alternative decision-making tools such as long-run marginal cost are sometimes utilized. We also find that though tariff decision is based on economic factors such as the exchange rate, cost of production, service charges, levies among others, there are instances where premium has been placed on a balance between electoral fortunes and economic realities. This practice often disregards energy sector plans, limits transparency and accountability in the tariff determination process and suspends the automatic adjustment formula. This has contributed to needless investments which have resulted in the estimated energy sector (electricity and gas) debt of more than $2.8 billion as of the December, 2019. We recommend continuous expansion and distribution of power among the large number of organizations including a space for civil society organizations to hold duty bearers accountable in the energy sector to promote effective delivery of services sustain the development of the sector.

This paper will be part of the OGEL Special Issue on "Review of the Energy Sector in Ghana". More information here www.ogel.org/news.asp?key=647