Executive Director of the Institute for Energy Research and Policy, Kwadwo Poku, has called for an end to repeated financial bailouts for the Electricity Company of Ghana (ECG), warning that continued inefficiencies across the power distribution network are placing an unsustainable burden on taxpayers.
His comments come after the Ghana Utility Workers Union (GUWU) criticised the government’s decision to appoint a transaction advisor to oversee private sector participation in ECG, describing the move as an act of bad faith.
Speaking to 3Business on August 5, Kwadwo Poku said Ghana could no longer afford to support a power distributor that continues to record losses across the electricity value chain.
According to him, meaningful reforms are needed to improve operational efficiency, reduce revenue leakages and restore the utility’s financial sustainability.
“We should definitely bring in some level of efficiency. Let somebody invest money, and the person who invests the money should also manage the company,” he said.
The Executive Director however, urged stakeholders to await the recommendations of the transaction advisor before drawing conclusions about the government’s preferred model for private sector participation.
“We should all wait for the transaction advisor to present the report and see the direction it advises government to take,” he added.
He noted that although ECG recorded significant foreign exchange gains due to the appreciation of the cedi, the utility continues to carry substantial long-term debt.
“If you look at their financial statements presented at the recent AGM, they recorded foreign exchange gains of about GH¢12 billion because when customers pay their bills they pay in cedis, and when ECG converted those funds to dollars, the stronger cedi resulted in exchange gains,” he explained.
He further added that, the company also has long-term borrowings of about GH¢21 billion and should have built on what he described as its improved performance in 2024.
Poku also warned that, unless ECG addresses persistent losses in metering, billing and revenue collection, any private sector arrangement would struggle to deliver lasting improvements and could ultimately shift the financial burden onto consumers.
The government has begun processes to introduce private sector participation in ECG as part of efforts to improve operational efficiency, strengthen revenue mobilisation and reduce financial losses in the power sector.
The move has been opposed by the Ghana Utility Workers Union, which argues that the decision lacks adequate stakeholder consultation. ECG has for years faced challenges including high system losses, mounting debt, low revenue collection and persistent liquidity constraints that have affected the entire electricity value chain.
By Coffie Mawuedem Noel
