ECG Poor Performance Could Undermine Progress Made In Debt Restructuring – ACEP

The African Centre for Energy Policy (ACEP) has expressed worry over ineffective management practices and seeming political interference at state-owned utility service provider, Electricity Company of Ghana (ECG). According to the civil society organisation, the mismanagement of ECG poses a threat to the company and the country’s budget as ECG does not collect enough revenue to account for power sales.

Speaking to journalists in Accra on Thursday, the Policy Lead on Petroleum and Conventional Energy at ACEP, Kodzo Yaotse, noted that ECG’s financial situation has rather worsened over time where between 2017 and 2022, the company’s losses increased from GH¢295 million to about GH¢9.7 billion.

He said, “Recent reports published by PURC show that the under-recoveries between August 2023 and July 2024 amount to about 13.6 billion Ghana Cedis. That is just shortfalls from the power sector. And it also shows that the average collection rate within the period was an abysmal 43%. This poor performance raises doubts about the efficiency of the touted digitalisation efforts to bring more revenue through the new ECG Power App introduced in January 2023.”

He also observed, ECG failed to account properly the revenue it was able to collect, where it became evident after a recent validation of the company’s revenue that directives by PURC and the Presidency were not complied with. ECG was found to have operated 61 accounts through 16 different banks.

“Therefore, the PURC’s letter to the Energy Minister is only a rehash of an old problem known to all players in the sector, including the Minister himself. In fact, the PURC had written earlier to the President to highlight the same issues but got no results. What makes the Commission think it will get results from the Minister remains rather curious.”, He queried

The African Centre for Energy Policy (ACEP) has expressed worry over ineffective management practices and seeming political interference at state-owned utility service provider, Electricity Company of Ghana (ECG). According to the civil society organisation, the mismanagement of ECG poses a threat to the company and the country’s budget as ECG does not collect enough revenue to account for power sales.

Speaking to journalists in Accra on Thursday, the Policy Lead on Petroleum and Conventional Energy at ACEP, Kodzo Yaotse, noted that ECG’s financial situation has rather worsened over time where between 2017 and 2022, the company’s losses increased from GH¢295 million to about GH¢9.7 billion.

He said, “Recent reports published by PURC show that the under-recoveries between August 2023 and July 2024 amount to about 13.6 billion Ghana Cedis. That is just shortfalls from the power sector. And it also shows that the average collection rate within the period was an abysmal 43%. This poor performance raises doubts about the efficiency of the touted digitalisation efforts to bring more revenue through the new ECG Power App introduced in January 2023.”

He also observed, ECG failed to account properly the revenue it was able to collect, where it became evident after a recent validation of the company’s revenue that directives by PURC and the Presidency were not complied with. ECG was found to have operated 61 accounts through 16 different banks.

“Therefore, the PURC’s letter to the Energy Minister is only a rehash of an old problem known to all players in the sector, including the Minister himself. In fact, the PURC had written earlier to the President to highlight the same issues but got no results. What makes the Commission think it will get results from the Minister remains rather curious.”, He queried

ACEP is however demanding the following:

1. PURC should assume its regulatory functions over ECG. Specifically, the Commission should implement aggressive measures to have visibility over how much revenue is collected and spent on value chain participants and any other expenditures that may be undermining the sustainability of the sector. 
2. PURC should immediately audit the Hubtel contract and verify all the payments made to the company to assure value for money for the country and clarify discrepancies in cash values reported by Hubtel and ECG.
3. The current management of ECG should be relieved of their jobs and immediately replaced with effective and transparent management that will salvage the company and its attendant fiscal burden on the state and the people of Ghana.

ACEP is however demanding the following:

1. PURC should assume its regulatory functions over ECG. Specifically, the Commission should implement aggressive measures to have visibility over how much revenue is collected and spent on value chain participants and any other expenditures that may be undermining the sustainability of the sector. 
2. PURC should immediately audit the Hubtel contract and verify all the payments made to the company to assure value for money for the country and clarify discrepancies in cash values reported by Hubtel and ECG.
3. The current management of ECG should be relieved of their jobs and immediately replaced with effective and transparent management that will salvage the company and its attendant fiscal burden on the state and the people of Ghana.

Source:ceditalk.com