Ghana and Cote d’Ivoire’s cooperation to fight crises
Joint projects could help boost regional interconnectivity and allow Ghana to meet production shortfalls until its new projects come on line.
Even though Côte d’Ivoire lags behind its neighbour in electricity production, the Ivorian government is supplying electricity to blackout-prone Ghana. The energy crisis over the past three years and the doubling of Ghana’s utility tariffs in January have raised the cost of doing business, causing some small enterprises to collapse. Others have been looking west to Côte d’Ivoire for brighter pastures.
The head of the Association of Ghana Industries (AGI), James Asare-Adjei, says the AGI is counting the number of companies that have moved their operations to Côte d’Ivoire. And it is not just local manufacturers that are looking west.
Mohammed Adam Amin, the executive director of the Accra-based think tank the Africa Centre for Energy Policy (ACEP), says that small companies are not the only ones to leave: “A number of oil companies have decided to move to Côte d’Ivoire to set up their head offices there.”
The electricity situation in Ghana is slowly improving. In November 2015, the 225MW Turkish Karpower barge arrived in the country, seven months later than planned. Despite its installation, the country’s peak demand has fallen since the end of the 2015. Amin says that Ghana’s peak demand can reach 2,300MW but is currently around 1,800MW, a reduction that he says comes from a slowdown in industry.
The International Energy Agency estimates that 72% of Ghanaians had access to electricity in 2013 while only 26% of Ivorians did. Nonetheless, Ghana has been importing power from Côte d’Ivoire to help meet its shortfalls.
In December, Ghana imported 250MW from Côte d’Ivoire. As the country enters an election year, Amin argues that the move is unlikely to be just a short-term remedy and Ghana could well continue to turn to its neighbours for relief as it tries to stabilise the energy sector with various expansion projects and new developments – fiscal and physical – over the next five years.
Ghana’s ability to be more self-sufficient in electricity production depends on the activities of its oil and gas sectors. Ghana’s prospects for oil production are not as high as predicted in the medium term, not least because a number of outstanding procurement contracts have yet to be executed by exploration companies.
National electrification rate: Ghana 72%, Cote d’Ivoire 26%
There is still optimism for the sector, though. Amin says: “Although Ghana has relatively modest levels of oil production, it is well positioned in the region to become the petrochemical hub […]. It can also become the service hub of the region, where oil service companies station in Ghana and move between Ghana and Nigeria, Côte d’Ivoire, Sierra Leone and Liberia […] because of our relative stability but also being in the centre of all of these countries. Ghana can take advantage of that if we are able to build the necessary infrastructure.”
Côte d’Ivoire’s oil sector is much smaller than Ghana’s, and the government there is also focusing a lot of its attention on the need for electricity. The launch of the 139MW Azito 3 power station north of Abidjan in June 2015 brought the country’s electricity production capacity to 1,772MW. Côte d’Ivoire’s political instability after the troubled 2010 presidential election has led to less investment in new projects.
Ivorian President Alassane Ouattara’s government plans to boost production to 4,000MW by 2020 and will continue to supply Ghana with power. Oil and energy minister Adama Toungara tells The Africa Report: “We have very good relations with Ghana. We export several dozen megawatts per year to Ghana. Everything is decided between President Ouattara and his counterpart John Mahama.”
Chronic gas-supply deficits from the West African Gas Pipeline Company are part of Ghana’s energy problems. Ghana and Côte d’Ivoire are working together on projects to address this issue. One possible deal would lead to the extension of the West African pipeline to the Ivorian city of Assinie, not far from several gas deposits.