Why the Association of Ghana Industries must embrace Government’s nuclear power initiatives

A famous Ghanaian politician, Dan Lartey, who is credited with the concept of ‘Domestication’ explained it as ‘grow what you eat and can what you cannot.’

This expression represents an interesting reference to the relationship between agriculture and industrialisation. The ‘grow’ bit refers to agriculture while the ‘can’ means putting an agricultural produce such as fish or tomato into a can as a package for sale to the consumer.

Indeed, many development experts have testified to the transformational outcomes for countries that take deliberate actions in developing the agriculture and industrial sectors as a value chain whose end product can be sold locally and internationally.

This result is possible because the term industrialization is explained to mean the process of transforming the economy of a nation or region from a focus on agriculture to a reliance on manufacturing.

In Ghana, this fact is recognised at the governmental level. Hence, these two sectors have dedicated ministries – Food and Agriculture and Trade and Industry to facilitate their development.

There are many industries in the country that provide practical examples of the linkage between agriculture and industry. From biscuit manufacturing through plastics to textiles, Ghanaian industries turn agricultural produce into industrial products.

The relevance of Association of Ghana Industries (AGI)

These industrial concerns are mostly private. Thus, to present a formidable front in order to obtain relevant support from government, the managers of these companies set up the Association of Ghana Industries (AGI) in 1957. A not-for profit business organisation, AGI was incorporated in 1958 by a group of indigenous manufacturers in Ghana.

Currently, the AGI is recognised as the leading voice of the private sector in Ghana. It has a vision to be the number one voice for industry by growing a strong industrial base. This, it does, by contributing substantially to the growth and development of industry through effective policy advocacy and provision of business support services.

For the past 67 years, the over 1,200 member-companies of AGI have contributed greatly to Ghana’s industrialisation efforts. This has been done through effective collaboration with successive governments. Currently, AGI’s member-companies play crucial roles in the government’s One-District-One- Factory (1D1F) initiative.

About 25% of these companies are medium and large-scale industries while the remaining belong to the micro and small-scale category.

Effect of high cost of electricity on AGI members

As industrial establishments, one main input required for their effective functioning is electricity. This utility, essentially, serves as their blood without which operations grind to a halt.

Fortunately, as of 2022 the country’s electrification rate stood at 89%, an indication that most parts of the country have electricity supply for use by industries wherever they are sited. Actually, the data from the Energy Commission, as referenced by the Chief Executive Officer of AGI, Mr Seth Twum-Akwaboah at a workshop for media professionals organised by Nuclear Power Ghana from 4th to 6th June, 2024, indicates that there are plans by the government to attain 100% electrification by 2030. This is good news considering the fact that AGI’s member-companies are located all over the country.

The Energy Commission’s data further reveals that cumulatively, as of 2022, industry consumed 42% of power generated from hydro, thermal and solar sources in the country. This statistic evinces the vital role industry plays in Ghana’s economic development. At the least, it provides significant ready market for the power generation companies such as the Volta River Authority and the Independent Power Producers (IPPs).

However, this vital input for production takes a significant toll on the finances of manufacturing companies. Again, the Energy Commission estimates that cost of electricity constitutes 20% to 30% of production costs.

Clearly, this is a drain on the financial resources of these industrial concerns. This situation is compounded by the fact that electricity supply from the above-mentioned sources is not reliable as there are occasional disruptions due to draught in the case of hydro, or shortage of natural gas in respect of the thermal plants.

The prevailing erratic power supply challenge, commonly referred to as ‘Dumsor’ has not just affected production and profit levels, it has virtually collapsed some small-scale industries. The situation is compounded by the quarterly increase in tariffs announced by the Public Utility Regulatory Commission (PURC).

The above scenario puts the AGI in an energy trilemma of non-secure/ reliable power, unaffordable/unavailable and non-green/clean power.

Nuclear Power Ghana to the rescue

It is for this reason that member-companies of AGI heaved a sigh of relief when the government, initiated discussions on nuclear energy.

According to Wikipedia, “Nuclear power is the use of nuclear reactions to produce electricity. Nuclear power can be obtained from nuclear fission, nuclear decay and nuclear fusion reactions. Presently, the vast majority of electricity from nuclear power is produced by nuclear fission of uranium and plutonium in nuclear power plants.”

This source of electricity has been touted as being of low-carbon footprint compared to alternatives like fossil fuels, is key to combating climate change and reaching net zero, safe and reliable– providing power whatever the weather and most importantly, relatively cheaper.

Thankfully, the government of Ghana has moved the discussions forward by setting up Nuclear Power Ghana (NPG). Information available on its website indicates that, established in 2018, NPG is responsible for “project development, project feasibility, plant and site licensing, regulatory compliance, construction, and commissioning as well as ensuring that the plant is operational, maintained and decommissioned in compliance with International best practices.”

Its vision is “to be a regional leader in the provision of affordable, reliable, and sustainable low-carbon emission energy.” And the progress report is very encouraging, according to the Executive Director of NPG. Dr Stephen Yamoah.

“In our quest to ensure the successful implementation of the nuclear power project, the Ministry of Energy and NPG have been active on the international front discussing vendor issues and evaluating proposals. These meetings are critical as they allow us to assess the best technological and operational solutions for our Project and have culminated in the signing of some significant agreements.

The first is the signing of a cooperation and framework agreement between NPG and CNNC Overseas Limited for the construction of a large reactor project and upgrading Ghana’s grid infrastructure to accommodate additional power generated and ensure efficient distribution across the country.

The second is the recent signing of two (2) Memorandums of Understanding (MoUs) between Ghana, through the Ghana Atomic Energy Commission (GAEC), and the United States to establish a Regional Welding Certification Programme and a contractual agreement for the provision of a NuScale Exploration (E2) Centre at GAEC, “ Dr Yamoah disclosed at the aforementioned 3-day workshop for journalists in Accra.

Nuclear power as a game changer for AGI

The efforts by government of Ghana to introduce nuclear energy is therefore a game changer for AGI’s member- companies. The reasons are obvious- all things being equal, cost of production will reduce as nuclear energy is more affordable. AGI’s member-companies could thus plough back the savings that would be made from cost of electricity into expanding their facilities.

Expanded facilities means employment opportunities will be created for the teeming unemployed youth as well as avenue for additional income tax revenue for government.

Moreover, the deployment of nuclear energy is likely to encourage more investments into the industrial sector due to its affordable and reliable attributes. This will engender innovation and technology transfer, Public-Private Partnerships, collaborations with international nuclear firms and development of new competencies of staff of AGI member-companies.

The need for AGI to ready itself for the nuclear energy era can therefore not be overemphasised. AGI must build the capacity of its members. They must be encouraged to invest in appropriate infrastructure as well as upgrade their facilities.

Any anticipated challenges must be resolved through constant engagement with relevant stakeholders. Given the level of preparedness exhibited by the Management of NPG to roll out nuclear power, it behooves AGI to strengthen the existing collaboration to ensure that the necessary regulatory framework will be instituted to enable members benefit fully from this endeavour.

As was assured by Dr Yamoah in his opening remarks during the workshop, the question regarding the resort to nuclear energy is not whether it is the best alternative. It is when are we going nuclear? And the answer is, we are almost there?