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President John Dramani Mahama appears to have contradicted the Power Ministry and the Electricity Company of Ghana’s (ECG) recent announcement of subsidies for low level power consumers, saying ECG has only realigned their billing structure.

According to the President, the ECG realigned the billing system in a bid to make the billing process more transparent.

“It is not a subsidy. It is a realignment of the billing system that makes it possible for us to be able to know how much we are spending on electricity,” the President said in an address to Muslims on the occasion of Eid al-Fitr.

The ECG announced a revision of utility tariffs in the country, and the introduction of new subsidies to cushion low level consumers of electricity.

Deputy Power Minister, John Jinapor, further explained that the new subsidies are in categories and bands and were expected to bring relief to users.

But critics including the Integrated Social Development Center (ISODEC), are skeptical over the subsidies and have called for a reduction of levies on electricity tariffs instead.

The Minority Spokesperson on Energy, K.T. Hammond, also lambasted government over the supposed subsidy, and said it made no sense.

Realignment will bring transparency to billing

But President Mahama appears to have made nonsense of all the criticisms and the noise about subsidies, by claiming that what the ECG did was only a realignment of its billing system, to bring some form of relief to power consumers.

According to the President, “They [ECG] have done a realignment of their billing system and I believe that people can begin to see some relief in terms of the bills they were paying. The bills have been made more transparent so that you can tell with every unit you buy how much the value of the unit is,” he added.

Dr. Wereko Brobbey disagrees

A former CEO of the Volta River Authority (VRA) and policy analyst, Dr Charles Wereko-Brobbey, had already rejected claims of subsidies saying Government was not being truthful.

Following the announcement on Monday, he insisted to Citi Business News that no subsidy had been introduced.

According to Dr. Brobby, “It is not true; you are being charged VAT, energy levies, street light among others and those have gone up from almost 1 to about 5 percent…when you say you are subsidizing something, it means you are charging below how much it costs. But here is the case that you (government) are giving with the left hand, yet you are taking with the right.”

ECG introduces new tariffs

The ECG announced it had revised utility tariffs in the country effective July
1. The company in the new tariffs said it had introduced new subsidies to cushion low level consumers of electricity.

This followed red flags raised by businesses and individuals early this year, about what they called “killer tariffs” following the outrageous bills they had to pay.

The ECG has earlier said the subsidy will affect about 400,000 out of the 3.1 million customers including non-residential, with about 2.3 million being residential, and were expected to last for six months and expected to cost the government some GHC300 million.