Accra, Ghana -: The Africa Centre for Energy Policy (ACEP) has called for the dissolution of the Management of the Electricity Company of Ghana (ECG) due to its ongoing mismanagement of the strategic state entity. According to the Energy Think Tank, the mismanagement of the Electricity Company is reaching critical levels, threatening both the company’s survival and the sustainability of Ghana’s national budget.
Presenting a release to the media at its head office in Accra on Thursday, September 19, 2024, ACEP’s Policy Lead for Petroleum & Conventional Energy, Kodzo Yaotse, accused ECG of chronic inefficiencies, particularly in revenue collection, which has left the company with mounting losses. Between 2017 and 2022, ECG’s financial losses skyrocketed from GHS 295 million to an alarming GHS 9.7 billion. Recent figures from the Public Utilities Regulatory Commission (PURC) show that between August 2023 and July 2024, the company’s revenue collection rate averaged a mere 43%, putting further strain on the national budget.
ACEP’s statement highlights how ECG’s poor performance has not only worsened over time but has also remained largely unchecked by political leaders. “Despite numerous warnings, politicians have failed to take decisive action to reform ECG,” he stated. The utility company’s inefficiencies have become a growing burden on the public, who continue to subsidize its operations.
At the heart of the problem is ECG’s inability to account for the revenue it collects. A PwC validation revealed that ECG has been operating 61 accounts through 16 different banks, without making the details visible to auditors. This lack of transparency has raised significant concerns about where the money is going and how it is being managed.
The release also criticizes ECG’s much-publicized digitalization efforts. The introduction of the ECG PowerApp in January 2023 was meant to streamline payment processes and improve revenue collection. However, data shows that revenue performance has worsened since the app’s launch, with the system being described as a “procurement-driven” initiative rather than a genuine efficiency measure.
Furthermore, ACEP alleges that ECG has engaged in exchange rate manipulations, significantly inflating costs reported to the government. The company’s handling of exchange rates led to a GHS 6.5 billion net exchange loss in 2022, a figure that rose to GHS 7 billion in 2023. This, combined with ECG’s ongoing debts to Independent Power Producers (IPPs) and gas suppliers, threatens to destabilize the country’s economic recovery following its recent debt restructuring.
“The growing fiscal burden imposed by ECG’s poor performance is a ticking time bomb,” warned Kodzo Yaotse, ACEP’s Policy Lead for Petroleum & Conventional Energy. He added that unless swift corrective actions are taken, Ghana risks plunging into yet another debt crisis.
ACEP’s recommendations include an immediate audit of ECG’s contracts and expenditures, particularly its agreement with Hubtel for the development of the controversial PowerApp. The press release also calls for the current management of ECG to be replaced with leaders who can salvage the company and mitigate its negative impact on the nation’s finances.
With Ghana’s energy sector facing increasing financial pressure, the statement serves as a stark warning that time is running out for both ECG and the government to implement lasting reforms.
Source: Clement Akoloh||africanewsradio.com
