Ghana Ensures World Cup on TV by Slowing Aluminum Smelter Power.

 

Ghana will boost power production during its World Cup matches and asked the nation’s largest aluminum smelter to reduce consumption to make sure that scheduled blackouts don’t interfere with Black Stars’ games.

Neighbor Ivory Coast has agreed to supply 50 megawatts to Ghana during its games, which don’t overlap with its own matches, the Public Utilities Regulatory Commission said in an e-mailed statement. The Volta Aluminum Co. has been asked to reduce power use during Black Stars matches, the agency said. Ghana plays its first game on June 16 in Natal, Brazil, against the U.S. The tournament starts tomorrow, with the host nation’s team facing Croatia. 

“These plans are put in place for consumers to watch uninterruptible football matches during the World Cup,” the agency said in the statement. “Within these arrangements the load-shedding schedule, though varied, still exists.”

Ghana will probably have to ration power through the first quarter of 2015 because it lacks the spare capacity to replace plants shut down for repair, the Volta River Authority said last month. The agency provides 80 percent of the nation’s power. Ghana has been rationing power this month because of a shortage of natural gas to fire power plants and below average levels of water at hydroelectric plants.

“That essentially sounds like a populist measure given the reforms needed in the power sector of the country” Shilan Shah, economist at Capital Economics in London, said by phone. “There is growing dismay among the people over cost of living, rising inflation and government putting cap on wages.” 

Inflation Risk

The world’s second-largest cocoa producer generates about 2,000 megawatts of power, below capacity of 2,800 megawatts, according to the Volta River Authority.

Ghana will probably report a budget gap wider than 10 percent of gross domestic product for a third year in 2014 because of rising government wages and a decline in the currency that is making imports from gas to food more expensive, Fitch Ratings said this year. The central bank has been printing money to fund the deficit in the first quarter, threatening to stoke inflation that reached 14.8 percent in May further, Fitch said this week. 

Fitch has a negative outlook on Ghana’s credit rating of B, five levels below investment grade. The finance ministry denied Fitch’s report yesterday. Central bank Governor Kofi Wampah didn’t return calls or text messages.

“The government wants the people to have power so they can watch the game,” Yvonne Mhango, Johannesburg-based sub-Saharan Africa economist at Renaissance Capital, said by phone. “The government should be concerned that if this was not budgeted for from the beginning of the year, it represents an additional cost on the annual budget.”