In a bid to address financial mismanagement, inadequate service delivery, and inefficiencies in the energy sector that may have dire consequences for Ghanaians, President John Dramani Mahama has announced that the government is considering the privatization of Ghana's power distribution company, the Electricity Company of Ghana (ECG).

This move aims to resolve numerous problems within the entire power value chain in the country.

During a meeting with a delegation from the World Bank on Wednesday, January 8, 2025, Mahama noted that leveraging expertise from the Bretton Woods institution is part of a broader strategy to modernise and enhance the performance of the energy sector.

“If we don’t fix the Electricity Company of Ghana, we will continue to have a major problem with our whole power value chain. So, going ahead with privatizing the last point of electricity distribution, bringing in private sector efficiency is something that we want to take up again. We want to speak with the World Bank to get the expertise to be able to do that,” he said.

He asserted that once this strategy is implemented, the growing energy demands of the country will be met.

Meanwhile, energy experts, including the Institute for Energy Security (IES), have attributed the looming power outages to systemic inefficiencies and poor planning by the Akufo-Addo-led government.

The Electricity Company of Ghana in 2022 suffered a GH¢10.21 billion loss, worse than the GH¢1.91 billion recorded in 2021.

This represented more than a 433% loss in 2022, largely due to exchange rate losses resulting from the cedi depreciation and increased costs of distributing power to consumers.

The power distributor’s losses were captured in the latest Auditor General’s Report on the accounts of public boards, corporations, and other statutory institutions in 2023.

For the period under review, ECG’s income increased by 24.1% to GH¢15.03 billion in 2022 from GH¢12.10 billion in 2021, largely due to increased internally generated funds and government grants.

The grants were payments made to power-producing companies by the government on behalf of the power distributor.

Its total expenditure increased significantly by 80% to GH¢25.23 billion in 2022 from GH¢14.02 billion in 2021, mainly due to increases in direct costs and foreign exchange losses.

The increase in direct costs was primarily attributed to increases in the cost of power purchased and transmission costs.

SA/MA

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