In a bold move to address inefficiencies in Ghana’s power sector, Energy Minister-Designate John Jinapor has ordered the Electricity Company of Ghana (ECG) to halt all payments for supplies immediately.
The directive, announced during an interview on Citi FM on Thursday, January 9, 2025, aims to stabilise the company’s operations and pave the way for significant reforms.
Addressing Financial Leakages
Mr. Jinapor highlighted the urgent need for restructuring ECG’s financial practices, pointing to alarming inefficiencies in its revenue collection and financial management.
According to the Minister-Designate, ECG currently loses over 40 percent of generated power, a stark contrast to international standards of 2-4 percent losses.
“The challenge of money emanates from inefficiencies,” Mr. Jinapor stated.
“If ECG loses over 40 percent of its power generated, no matter what you do, you cannot find a solution.”
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He also criticised the company’s fragmented financial framework, citing over 70 accounts that hinder effective monitoring and control.
“All those numerous accounts will be closed,” he declared, adding that reforms to consolidate and streamline ECG’s financial operations will be implemented promptly.
Push for Private Sector Involvement
The Minister-Designate underscored the need for private sector involvement as a sustainable solution to ECG’s challenges.
He revealed plans to engage technical teams, consultants, and international partners, including the World Bank and IMF, to create a transparent framework for private sector participation.
“Especially with the billing and collection, we need to set good KPIs, go through a competitive tender process, and get the best so we can improve ECG’s systems,” Mr. Jinapor said.
“The truth is, we have no alternative but to involve the private sector.”
Presidential Backing for Reforms
President John Dramani Mahama has endorsed the push for privatisation, citing ECG’s persistent operational inefficiencies, financial mismanagement, and poor service delivery.
During an address on January 8, 2025, the President confirmed ongoing discussions to bring private sector expertise into power distribution to enhance efficiency and customer satisfaction.
Tough Stance on Non-Compliance
Mr. Jinapor issued a stern warning to ECG staff, particularly those in the finance department, against disregarding the directive to suspend payments.
“Please don’t, and I mean it, because there are serious consequences if you flout this directive,” he cautioned.
Reform Agenda
The Minister-Designate’s decisive actions signal the beginning of a comprehensive reform agenda aimed at transforming ECG into a more efficient and accountable organisation.
By tackling revenue losses, closing redundant accounts, and involving private expertise, the government hopes to build a robust power sector capable of meeting Ghana’s growing energy demands.
As these changes unfold, the public and stakeholders will be closely watching to see if the reforms can deliver the intended outcomes and end ECG’s long-standing inefficiencies.
