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Awotwi: Government ownership of utility firms doesn’t make sense

The former VRA chairman says governments could avoid losing votes for inefficiencies in the power sector if they transfer the risk to private investors

Kweku Awotwi, the immediate past chairman of the Volta River Authority (VRA) has stated that it does not make business sense for government to run utility companies in the 21st century.

Speaking on Sunday Night with Nana Yaa Mensah, Awotwi, also a former managing director of Tullow Ghana, said that African governments must move away from total ownership of utility companies to help inject some efficiency in the power sector.

“My sense of it is this, that African countries as a whole, perhaps as reaction to colonialism, what else I am not sure, we have deemed a lot of these assets, they have to be owned by the state and at some point, it makes sense… but today in 2021 it doesn’t make sense,” Awotwi said.

He added: “Most countries around the world, especially not in Africa have privatised their utility assets because there is really a drive to make them efficient, and we haven’t.”

Awotwi said governments could avoid losing votes for inefficiencies in the power by transferring the risk to private investors.

Shift the risk

“Unfortunately for us when these assets are owned by the state, there is a political dimension to it, because if electricity is too expensive, I might not get voted for, whereas if it’s sort of given to a private company, you have actually given that problem to somebody else to deal with it and manage for you,” Awotwi said.

“Of course, it directly comes back to government. But when it is owned by the government you feel it more. And I frankly think that has been the challenge for most African countries.”

Currently, Côte d’Ivoire and Kenya are among a handful of African countries said to be running efficient power systems because they have liberalised the sector.

Fred Dzakpata

Asaase Radio 99.5 – tune in or log on to broadcasts online
Follow us on Twitter: @asaaseradio995

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