Adnan Adams Mohammed
The Minister-Designate for Energy, John Jinapor, has directed the Electricity Company of Ghana (ECG) to immediately suspend all payments for supplies as part of a broader strategy to address inefficiencies and stabilize the power sector.
Jinapor emphasized that this directive is backed by the Chief of Staff and aims to halt financial leakages within the company.
Highlighting ECG’s financial struggles, Jinapor revealed that the company is grappling with significant revenue losses, with over 40% of generated power unaccounted for. He warned ECG staff, particularly those in the finance directorate, that ignoring the directive would lead to severe consequences.
“The challenge of money emanates from inefficiencies,” Jinapor said in an interview last week after his nomination. “If ECG loses over 40% of its power generated, no matter what you do, you cannot find a solution.”
He is worried that, while other countries are doing just about 2-4% losses. In Ghana, for each US$100 worth of power, ECG collects only 60%.
“On top of that, there are numerous deductions for contracts, quality assurance, IT, and other provisions” he added.
Jinapor also pointed out that ECG operates over 70 accounts, making effective monitoring and control nearly impossible.
As part of his reform agenda, he pledged to streamline the company’s operations by consolidating its accounts and implementing measures to ensure financial discipline.
“All those numerous accounts will be closed. We need some serious buffers to anchor the system. This sector needs reform, and we will reform it,” Jinapor stressed.
The Minister-Designate assured the public that these measures are necessary to stabilize the power sector and improve service delivery, promising significant reforms to enhance the efficiency of ECG’s operations.
Meanwhile, President John Dramani Mahama has signalled the potential privatisation of the Electricity Company of Ghana (ECG) as part of efforts to tackle longstanding inefficiencies in the country’s power distribution system. Speaking during a meeting with a World Bank delegation at his private office in Accra last week, President Mahama expressed confidence that private sector involvement could help resolve critical challenges such as operational inefficiencies, financial mismanagement, and poor service delivery within ECG.
“If we don’t fix the Electricity Company of Ghana, we will continue to face major problems across the entire power value chain,” President Mahama said, underscoring the urgency of reforms. He asserted that privatising ECG’s distribution operations could introduce the efficiency required to modernise the energy sector and meet Ghana’s increasing energy demands.
Reflecting on Ghana’s earlier engagement with the Millennium Challenge Corporation (MCC) Compact during his tenure as Vice President, Mahama emphasised the pivotal role of an efficient energy distribution system in driving national development goals.
The President reassured stakeholders that any decision to privatise ECG would be approached cautiously, with extensive consultations to balance public interest and the sector’s need for improved performance.
“We want to engage with the World Bank to leverage their expertise in implementing this initiative,” he stated.
Mahama further explained that privatisation would form part of a broader strategy to modernise Ghana’s energy infrastructure, ensuring sustainability, reliability, and enhanced service delivery
for citizens and businesses.
Also, further to solving the dire, critical situation of ECG’s management, the Member of Parliament for Evalue-Ajomoro-Gwira, Arko Nokoe, has advocated for strategic reforms in Ghana’s power sector to minimize losses and enhance efficiency. The legislator, in an interview last week, expressed frustration over the bureaucratic processes in the retail chain, which he believes foster inefficiencies, wastage, and theft.
“Why can’t ECG privatize the retail aspect of our power sector?” he questioned. “It’s incredible how customers struggle to acquire a new meter. This system needs a shake-up.”
The MP emphasized the importance of introducing private sector players to the retail side of electricity distribution. He proposed reforms that would allow private entities to handle critical
areas like the supply of transformers, metering, and the sale and purchase of electricity.
“It’s about time we had other players within the retail aspect of our energy sector,” he stated, adding that competition and innovation would drive efficiency and improve customer satisfaction. “Government remains ECG’s largest debtor, accounting for over 80% of the company’s debt. This is unacceptable,” he lamented. “We cannot expect the ECG to function efficiently when its largest client fails to honor its obligations. It’s time for the government to lead by example and settle its debts promptly. If we want to see real progress, this must change.”
The MP stressed that addressing the government’s debt and privatizing the retail aspect of the power sector could create the financial stability and operational efficiency needed to stabilize and transform Ghana’s electricity distribution framework.
Nokoe’s call comes at a time when the new NDC government is faced with a looming “dumsor” challenge. His proposal adds to the ongoing discussions on how best to revamp the country’s energy sector for sustainable growth and development.
