'ECG's collection losses at 15%, distribution at 40% not sustainable' - Prof Bokpin warns

Economist Professor Godfred Alufar Bokpin has raised concerns about inefficiencies in Ghana's power distribution system.

He stated that the Electricity Company of Ghana (ECG) has high distribution losses. These losses are significantly above global averages and are economically unsustainable.

On Joy News’ Newsfile, he noted that ECG’s technical and commercial losses are around 40%. He emphasized, “Even if you’re doing 15%, it is very high.” He added, “But 40%? That is simply not sustainable.”

Professor Bokpin expressed that Ghana’s energy crisis keeps him awake at night. He mentioned irresponsible mining as a concern but highlighted the energy sector as his main worry.

He criticized both the NDC and NPP for politicizing the issue. “We can no longer do politics with it,” he said. He believes fundamental issues need resolution.

In addition to distribution losses, he pointed out collection inefficiencies. “Collection losses are close to 15%. That’s again above the world average,” he explained.

Professor Bokpin also discussed pricing challenges in the energy sector. He noted there are tariff gaps and pricing formulas that do not reflect actual costs.

He highlighted another issue: government institutions failing to pay electricity bills. “It’s time ministries, departments, and agencies take responsibility for their energy consumption,” he stated.

He mentioned sensitive installations like educational institutions and police stations that do not pay for electricity.

To illustrate the problem, he shared an anecdote about ice blocks used by pure water sellers possibly coming from police stations. This raises serious concerns about accountability.

According to him, the entire system is flawed and cannot meet Ghana's future energy needs. “There is no way we can see a future in this direction,” he warned.

He criticized the government for discussing a 24-hour economy while struggling with basic power supply. “You’re talking about 24 hours?” he questioned.

Professor Bokpin argued that ECG's management model is broken and requires reform. He urged support for private sector participation in downstream distribution.

“This does not mean selling ECG,” he clarified. The government can remain the sole shareholder while inviting private investment into power distribution and revenue collection.

He believes private participation would bring necessary capital and efficiency lacking in state management alone.

“On this current model, I don’t think it is sustainable,” he said firmly.

He mentioned structural reforms under an IMF-supported program requiring clear indicators to be met. The cabinet must decide on private sector involvement with ECG soon, according to him.

In conclusion, Professor Bokpin reminded everyone: “We must be honest with ourselves.” He stressed that bold reforms are essential since the current path is ineffective.