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\u2019s survival and the sustainability of Ghana\u2019s national budget.
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Presenting a release to the media at its head office in Accra on Thursday, September 19, 2024, ACEP\u2019s 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\u2019s 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\u2019s revenue collection rate averaged a mere 43%, putting further strain on the national budget.
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ACEP’s statement highlights how ECG’s poor performance has not only worsened over time but has also remained largely unchecked by political leaders. \u201cDespite numerous warnings, politicians have failed to take decisive action to reform ECG,\u201d he stated. The utility company\u2019s inefficiencies have become a growing burden on the public, who continue to subsidize its operations.
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At the heart of the problem is ECG\u2019s 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.
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The release also criticizes ECG\u2019s 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\u2019s launch, with the system being described as a “procurement-driven” initiative rather than a genuine efficiency measure.
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Furthermore, ACEP alleges that ECG has engaged in exchange rate manipulations, significantly inflating costs reported to the government. The company\u2019s 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\u2019s ongoing debts to Independent Power Producers (IPPs) and gas suppliers, threatens to destabilize the country\u2019s economic recovery following its recent debt restructuring.
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\u201cThe growing fiscal burden imposed by ECG\u2019s poor performance is a ticking time bomb,\u201d warned Kodzo Yaotse, ACEP\u2019s Policy Lead for Petroleum & Conventional Energy. He added that unless swift corrective actions are taken, Ghana risks plunging into yet another debt crisis.
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ACEP\u2019s recommendations include an immediate audit of ECG\u2019s 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\u2019s finances.
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With Ghana\u2019s 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.
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Source: Clement Akoloh||africanewsradio.com<\/p>\n","protected":false},"excerpt":{"rendered":"
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