Naagyei 90.3 Fm Agyapa
The Electricity Company of Ghana (ECG), which distributes electricity, is in the midst of a financial crisis, spending billions of dollars from the national budget while dealing with inefficiencies and revenue losses.
Dr. Cassiel Ato Forson, the finance minister, says as much.
He disclosed these facts at the National Economic Dialogue, calling ECG’s operations unsustainable and cautioning that the nation’s energy industry may implode due to increasing debt if immediate reforms are not undertaken.
According to Dr. Forson, ECG only receives 62% of the total electricity it distributes, which means that about 40% of the power is either lost or not paid for.
With budget transfers of $2.1 billion over the last two years, the government has been compelled to constantly rescue the corporation due to this alarming revenue shortfall.
“The country is suffering greatly as a result of ECG’s inefficiency. The corporation still faces challenges with revenue collection and operational inefficiencies, despite the fact that government transfers to support the energy sector have reached unsustainable levels,” he said.
The Finance Minister claims that ECG’s financial issues are getting worse in spite of government intervention.
One of the largest risks to Ghana’s economic stability is the anticipated cumulative shortfall in the energy industry, which is predicted to reach over $9 billion by 2026.
Among the main issues are:
• High Distribution Losses: A sizable amount of electricity is either stolen through unauthorised connections or lost as a result of technical issues.
• Non-Payment of Bills: ECG has a lot of unpaid debt since it finds it difficult to get money from both public and private customers.
• Inadequate Cash Management: ECG frequently neglects to pay its debts to power producers, which leads to a domino effect of debt throughout the energy industry.
“Instead of being a major force behind industrial growth, the power sector has turned into a financial black hole that is dragging the entire economy down,” Dr. Forson said.
Electricity tariff price is one of ECG’s other main problems.
Dr. Forson agreed that raising rates alone is not a solution, even though tariffs do not accurately represent the full cost of electricity.
“In order to compensate for ECG’s inefficiencies, consumers cannot be made to pay higher tariffs. Rather, the core causes—poor financial management, significant system losses, and ineffective billing—must be addressed,” he said.
ECG’s inability to maintain financial stability despite sporadic tariff revisions has made it more dependent on government bailouts.
In order to address ECG’s structural issues and lessen its financial burden on the government, Dr. Forson advocated for immediate and drastic reforms. Among the suggested remedies are:
1. Improving revenue collection: Stricter enforcement actions are being taken to collect receivables from customers, including government organisations.
2. Cutting down on technical and financial losses by purchasing anti-theft devices and contemporary metering systems to stop unauthorised connections.
3. Privatisation or collaboration with the private sector: Investigating ways to use private management experience to boost productivity.
4. Putting cost-cutting strategies into action: Reducing operational waste and making sure ECG stays within its revenue range.
5. Improving financial accountability: To stop financial malfeasance, internal controls and oversight should be strengthened.
Dr. Forson was blunt in his assessment of the situation’s urgency.
“ECG will destroy Ghana’s economy if we do not take action right away. He cautioned, “We can’t keep throwing billions into a broken system.”
The finance minister called on all parties involved—government organisations, businesses, and ECG management—to pledge to a turnaround strategy that guarantees the power industry’s long-term viability.
