Dr. Cassiel Ato Forson, the Minister of Finance, has revealed that the electricity distribution company, Electricity Company of Ghana (ECG), is at the centre of a financial crisis.
The situation at the ECG, he lamented, is draining billions from the national budget while the company is also faced with inefficiencies and revenue losses.
He disclosed this while speaking on day one of the National Economic Dialogue, held on Monday, March 3, 2025.
He said that there was the need for urgent reforms to prevent the collapse of the energy sector.
According to him, ECG collects only 62% of the total electricity it distributes, while about 40% of the power supplied is unpaid for.
“The inefficiencies at ECG are costing the nation heavily. Government transfers to support the energy sector have reached unsustainable levels, yet the company continues to struggle with revenue collection and operational inefficiencies,” he stated.
He added that despite the government’s intervention, the situation at ECG has not improved.
Key challenges include:
• High Distribution Losses—A significant portion of power supplied is either lost due to technical faults or stolen through illegal connections.
• Non-Payment of Bills—ECG struggles to collect revenue from both government institutions and private consumers, leading to huge outstanding debts.
• Poor Cash Management—ECG often fails to settle its obligations to power producers, creating a chain reaction of debt across the energy sector.
“The power sector should be a key driver of industrial growth, but instead, it has become a financial black hole, dragging the entire economy down,” Dr. Forson stated.
“Consumers cannot be forced to pay higher tariffs to cover ECG’s inefficiencies. Instead, we must address the root causes—inefficient billing, high system losses, and poor financial management,” he explained.
He therefore proposed what he termed as radical reforms to fix ECG’s structural problems.
The proposed reforms include:
1. Strengthening revenue collection—Implementing strict enforcement measures to recover debts from consumers, including government agencies.
2. Reducing technical and commercial losses—investing in modern metering systems and anti-theft technology to prevent illegal connections.
3. Privatisation or partnership with the private sector—Exploring options to bring in private management expertise to improve efficiency.
4. Implementing cost-cutting measures—cutting down on operational waste and ensuring ECG operates within its revenue limits.
5. Enhancing financial accountability—Strengthening oversight and internal controls to prevent financial mismanagement.
By: Rainbowradioonline.com/Ghana
