The Africa Centre for Energy Policy (ACEP) has made a strong demand for the dismissal of the management of the Electricity Company of Ghana (ECG), citing significant mismanagement that has led to alarming revenue losses. The organization highlights that these losses have surged dramatically from GH¢295 million in 2017 to a staggering GH¢9.7 billion by 2022, raising serious concerns about the financial viability of the company and the broader implications for the Ghanaian economy.
During a press conference on September 19, ACEP’s policy lead on petroleum and conventional energy, Kodzo Yaotse, expressed grave concerns regarding ECG’s performance in its revenue mobilization efforts. He underscored the growing fiscal burden that ECG’s inefficiencies impose on the economy, characterizing the situation as a “ticking time bomb” that threatens to undermine the progress made through domestic and international debt restructuring initiatives aimed at keeping Ghana solvent.
“The growing fiscal burden imposed on the economy by ECG’s poor performance has become a ticking time bomb that can undermine the progress made after the domestic and international debt restructuring to keep Ghana solvent,” Yaotse stated. He emphasized that the current trajectory of debt accumulation, coupled with the increasing demands from independent power producers (IPPs) for payment, poses a significant risk to Ghana’s financial stability.
Mr. Yaotse pointed out that the pressure on the government to prioritize debt repayments over social investments is mounting. This situation raises concerns about the long-term implications for development efforts across the country. “With IPP debt mounting and gas suppliers and transporters demanding payments, the pressure on the government to sacrifice social investment is high,” he warned, indicating that the current mismanagement could have dire consequences for essential public services.
In addition to the call for leadership changes within ECG, ACEP criticized what it described as a wasteful use of state resources that cannot be allowed to continue. Yaotse argued that the persistent political lethargy that hampers ECG’s ability to deliver value to the people of Ghana is detrimental not only to the company but also to the nation’s budget and overall development efforts.
“The political lethargy to enable ECG to deliver value to the people of Ghana continues to hurt Ghana’s budget and, by extension, development efforts,” he asserted. Yaotse also referenced the Energy Sector Recovery Programme (ESRP), which estimates that the realized power sector shortfalls between 2019 and 2023 amounted to approximately US$8.25 billion. He described this figure as a sheer waste of public resources that must not be allowed to persist.
The implications of these issues are far-reaching, impacting not only the energy sector but also the overall economic landscape in Ghana. The growing financial strain on ECG threatens the stability of the power supply and could potentially lead to increased tariffs for consumers, further burdening the average Ghanaian household.
ACEP’s call for the dismissal of ECG management reflects a broader concern regarding accountability and governance in the energy sector. The organization argues that without significant changes in leadership and operational practices, ECG will continue to struggle in mobilizing revenue effectively, thereby exacerbating the financial challenges facing the country.
As the situation unfolds, the response from the government and relevant stakeholders will be crucial in determining the future trajectory of ECG and the energy sector in Ghana. The need for a comprehensive strategy to address these challenges is urgent, as the consequences of inaction could lead to a deeper crisis.
In conclusion, ACEP’s demand for the dismissal of the ECG management highlights the critical state of affairs within the company and the broader energy sector. With revenue losses at unprecedented levels, the call for accountability and reform is more pressing than ever. The implications of poor management extend beyond the financial realm, affecting social investments and development efforts that are vital for the progress of the nation. Stakeholders must take these warnings seriously to avert a potential crisis and ensure the sustainability of Ghana’s energy future.
