ECG’s Financial Woes Deepen as Government Bails It Out with $2.1 Billion

The Electricity Company of Ghana (ECG) is facing a severe financial crisis, with the government injecting $2.1 billion over the past two years to keep it afloat, Finance Minister Dr. Cassiel Ato Forson has revealed.

Speaking at the National Economic Dialogue, Dr. Forson described ECG’s current operational model as unsustainable, warning that if immediate reforms are not implemented, Ghana’s energy sector could collapse under a projected $9 billion debt burden by 2026.

ECG’s financial difficulties stem largely from its inability to collect payments for the electricity it supplies. According to Dr. Forson:

• ECG collects only 62% of the total power it distributes.
• Nearly 40% of electricity is lost through technical faults or power theft.
• The company struggles to recover payments from government agencies and private consumers, resulting in billions in unpaid bills.

This revenue gap has created a chain reaction, forcing the government to continuously bail out ECG, while independent power producers face delayed payments.

Dr. Forson disclosed that despite government intervention, ECG’s financial troubles are worsening. The cumulative shortfall in the power sector is expected to surpass $9 billion by 2026, making it one of the most pressing threats to Ghana’s economic stability.

He added that ECG’s poor cash management has led to consistent payment delays to power producers, further deepening the country’s energy crisis.

1. High Distribution Losses – A significant portion of electricity is lost due to outdated infrastructure and illegal connections.
2. Non-Payment of Bills – ECG has billions in unpaid invoices from both government and private users.
3. Poor Financial Management – Inefficiencies in billing and expenditure drain ECG’s resources.

Dr. Forson stressed that simply increasing tariffs is not the solution, as consumers should not bear the brunt of ECG’s inefficiencies. Instead, he proposed:

• Improving revenue collection – Strict enforcement to recover debts, including from government agencies.
• Reducing power losses – Investing in modern metering and anti-theft technologies.
• Exploring privatization or private sector partnerships to enhance efficiency.
• Cutting operational waste – Ensuring ECG operates within its revenue limits.
• Strengthening financial accountability – Preventing mismanagement and corruption within ECG.

Dr. Forson emphasized that the current situation is unsustainable, stating:
“If we do not act now, ECG will cripple Ghana’s economy. We cannot continue pouring billions into a broken system.”

He urged ECG management, government institutions, and private sector players to commit to a turnaround plan to prevent a full-scale collapse of Ghana’s energy sector.

Click the link Puretvonline.com | WhatsApp Channel to join the WhatsApp channel

GOT A STORY?

Contact/WhatsApp: +233243201960 or Email: manuelnkansah33@gmail.com