-- U.S. Ambassador McCarthy
What could be considered a threat to the financial and economic status of donor-dependent Liberia was laid bare on Thursday, August 26, 2021 by United States Ambassador, Michael McCarthy at a press conference where he told the government to fight power theft and corruption or lose donors’ support.
Power theft, being the key subject matter for the press conference at the US Embassy, has become rampant over the years with many people illegally connecting to the national grid, defrauding the Liberia Electricity Corporation, a public utility company, of much needed revenue. Meanwhile, others who need electricity often struggle through the proper channels of the LEC to get connected, but find it difficult to go through.
Since the US Government and other partners contributed $257 million to Liberia’s Energy Sector to rehabilitate the Mount Coffee Dam and restore power, the challenge of power theft has continued to impede the progress of the LEC, causing the public corporation not to realize any return on investment.
“If power theft and corruption continues in Liberia, the country will lose donors’ support,” said Ambassador McCarthy.
Rehabilitating the Mount Coffee Dam to increase the supply of consistent and reliable electricity was the main thought of donors but, as the case is now, a good number of people living in and around the capital do not have access to electricity, a situation the US Ambassador described as a disappointment.
Over the last five years the LEC, according to Ambassador McCarthy, has lost $220 million to technical and commercial losses and unpaid bills, stressing that such a huge amount should have been used to increase the grid to provide electricity access for all.
Following his visit to the Bushrod Island facility of the Liberia Electricity Corporation (LEC), Ambassador McCarthy said, “More than half of all the electricity LEC generates is not paid for. And each connection that isn’t generating revenue is a step toward the collapse of the electric grid.”
In a more frustrating comment, Ambassador McCarthy said the Government of Liberia is the largest customer of LEC electricity, and it is often behind on payments. In fact, the Ambassador said, there are some, including government officials and top business people, who have built a cartel with the purpose of benefiting LEC current so that, whenever technicians from LEC want to assess their meters to determine their bills, security officers harass them.
He said with the increase in power theft resulting in losses for LEC, with adverse effects on maintenance, Liberia’s partners and donors to the energy sector will like to see power thieves convicted, jailed for some months or fined heavily for their illegal action.
According to the Ambassador, the losses suffered by LEC include commercial (US$163.8 million) and technical (US$42.6 million), altogether constituting 62%; unpaid bills (US$13.6 million) subtracted from paid bills (US$134.7 million) constituting 38% of the total grid.
“Nowhere in the world is electricity free. I pay an electric bill at my home in the United States. As Minister Tweah said last week, Liberia is no different: if you want electricity, you must pay for it. Nobody has ever promised free electricity to the people of Liberia,” Ambassador McCarthy said.
The Ambassador continued by emphasizing that “If LEC can’t resolve this power theft issue, it will continue to weaken financially, become even more dependent on government funding, and reduce reliability in operations. This would in turn have a serious impact on the economic development of this country, which depends on reliable electricity, just like any other country, to attract new investments and grow the economy. This is the level of seriousness we are facing.”
The Ambassador, who was sharing the power theft concern on behalf of other contributors to Liberia’s energy sector including the EU, Germany and Japan, recalled that electricity tariff is very expensive in Liberia, citing that in 2020, Liberians paid 49 cents per kilowatt-hour for electricity.
“For comparison, Americans spend about 13 cents, the French pay about the same as Americans; Ghanaians spend an average of 6 cents, Guinea pay an average of 10 cents, and Ivorians spend an average of 12 cents,” he noted. “Why are Liberians paying four or five times more for less reliable electricity?”
Answering his own question, the Ambassador said each person that illegally connects to a power line, they are making everyone else underwrite the cost of power and making it harder to reduce the cost for those who do pay. “They are also making all connections less reliable, which will lead to even more maintenance costs down the road. The only way to reduce the cost of electricity is for every LEC customer to be properly connected and to pay their electricity bills,” Ambassador McCarthy stressed.
“Here and now,” the Ambassador said, “I call on every user of electricity in Liberia to pay their bills in order for the power sector to survive here.”
In his assertions, Ambassador McCarthy said it is not enough to say that the power theft situation is complicated, or that it is hard to fix. He said, “In order to protect our investments, and your future, and to set Liberia on the path to opportunity, we need to see action -- payment of electricity bills, prosecutions, convictions -- and we need to see substantial sentences and fines for power theft.”
He added, “I ask the Liberian Government and the people to take power theft more seriously, having invested so heavily in the power sector here, and it’s not too much for the U.S. Government to ask that the Liberian Government do more to protect our investments and its own power sector.”
The US diplomat concluded that what his government and others spend in the energy sector is from taxpayers and must be accounted for, and there is no way they will see taxpayers’ money spent without accountability and they continue to spend it without result.
He challenged the Liberian Government to take seriously the fight against power theft and endemic corruption in the country, emphasizing that the Biden-Harris Administration named corruption a core U.S. national security interest and the US is acting on this priority.
In order for public facilities and businesses to work efficiently, the Ambassador said it will take a commitment against corruption and power theft from each and every Liberian “... from the government down to each of you. We urge you to do what is right.”