The financial woes of Ghana’s power distributor, the Electricity Company of Ghana (ECG) continue to deepen worsening the profitability of the state-owned company.
The latest report by the Africa Center for Energy Policy (ACEP) reveals that the company’s losses for a period of five years astronomically increased by over 3000%.
The company between 2017 and 2022 deteriorated in losses jumping from GHS 294.9 million to a whopping GHS 9.7 billion representing a nearly 3200% increase in net losses within a span of five years.
ACEP’s data reveals that ECG’s financial struggles escalated sharply from 2019 onward, with losses reaching GHS 3 billion in 2018 and GHS 5.4 billion by 2020. By 2022, the losses had almost doubled from the 2020 figure.
“ECG does not collect enough revenue to account for power sales. This situation has worsened over time despite claims that the company is doing better. Between 2017 and 2022, ECG’s losses increased from about GHS 295 million to about GHS 9.7 billion,” parts of ACEP’s statement read.
This loss, ACEP mainly attributes to under-recoveries as the company is not able to efficiently collect the expected revenues that are commensurate with the power distributed.
For instance recent report, according to PURC as cited by ACEP, shows that under-recoveries between August 2023 and July 2024 amount to about GHS 13.6 billion. The average collection rate within the period was abysmal at 43% indicating the ECG’s inability to mobilize half its yearly expected revenue.
This poor revenue performance, ACEP contends it’s enough justification to question the much-touted digitalization efforts by the government.
“This poor performance raises doubt about the efficiency of the touted digitalization efforts to bring more revenue through the new ECG PowerApp introduced in January 2023. This new app replaced the “ECG Power” app, which had operated before December 2022,” ACEP indicated.
Given this gross inefficiencies in ECG’s operation, ACEP says to safeguard and improve the operations of the company, the Public Utilities Regulatory Commission should assume its regulatory functions over ECG where aggressive measures will be implemented to enhance revenue mobilization.
Source:thehighstreetjournal.com