Socio-economic effects of electricity crisis and coping strategies

Abstract

Ensuring there is regular supply of electricity to support industrial growth and development is a huge challenge for countries the world over. However, Ghana’s power supply challenges culminated into a four-year electricity crisis (2012-2016) that earned the name “dumsor,” meaning “on and off” in the Akan language. The crisis was different in its intensity, complexity, and reach from any previously recorded case. At its peak, a greater expanse of southern Ghana endured a load shedding schedule of 12 hours with electricity and 24 hours without electricity, with the capital city (Accra) being the worse affected. Heavy electricity consumers were among the hardest hit businesses since the dumsor did not only increase operational cost and reduce productivity but also resulted in significant withdrawal of investments. The narrative was progressively dismal for hotels because the industry has high entry and exit costs and their success and reputation is based on rendering quality services at a comparatively lower price. Thus, any compromise on their product results in disproportionate decline in patronage due to poor reviews and bad word-of-mouth. Given the above, a review of the socio-economic effects of dumsor on hotels and adopted coping strategies were needed to lay a framework to examine the effects of electricity crises on the tourism industry. Adopting a mixed- method approach, seventy-three (73) hotels in the Accra Metropolitan Area were engaged. The results reveal an increase in both operational cost and customer complaints. This brought about the adoption of diesel-fuelled generators as an immediate stop-gap measure to curb the crisis.