Accra, Ghana – A recent study by the Institute of Statistics, Social, and Economic Research (ISSER) has found that shared metering systems in compound houses are rendering electricity subsidies for the poor ineffective. This revelation is part of a larger analysis focused on fiscal interventions and social welfare policies aimed at reducing inequality in Ghana.
According to Ghana News Agency, the study, which assessed the impact and distribution of electricity subsidies, concluded that these subsidies, originally intended to support low-income households, are instead disproportionately benefiting wealthier households. According to ISSER, the inequity is primarily due to the prevalence of shared metering in compound houses, a common living arrangement in Ghana.
ISSER noted that even though individual household consumption in such settings might fall within the ‘lifeline’ low-usage band, the aggregated units of consumption recorded on a shared meter often exceed these bands. Consequently, households that should be benefiting from the subsidies end up paying more for electricity, effectively negating the subsidy’s purpose.
The World Bank supported ISSER’s findings, stating that the design and implementation of Ghana’s electricity subsidy program during the COVID-19 pandemic were regressive, benefiting wealthier households more than poorer ones.
To rectify this issue, ISSER recommended a revision of the tariff structure based on a comprehensive consumer profile. Furthermore, the Institute advised the government to facilitate the provision of individual electricity meters to households in shared compound dwellings. This measure would enable a more accurate and equitable distribution of electricity subsidies.
ISSER also urged the government to accelerate its rural electrification efforts. Expanding access to electricity in rural areas is seen as a crucial step towards ensuring that poorer households in these communities can benefit from government subsidies and improve their living conditions.