JoyNews national dialogue on the future of ECG

JoyNews held a National Dialogue on the Electricity Company of Ghana (ECG). The event focused on ECG’s operational and financial future.

The dialogue included key stakeholders, policymakers, regulators, and energy experts. They aimed to identify the root causes of ECG’s challenges. They also explored practical reforms for improvement.

Currently, ECG's debt exceeds GHS 68 billion. Independent power producers owe 1.73 billion dollars. This situation poses risks to national energy security and economic stability.

Discussions also addressed the potential privatization of ECG's operations. The previous NPP government committed to this under an IMF program. The current government is considering privatization to enhance efficiency and performance.

Key recommendations emerged from the dialogue:

1. Improve Revenue Collection Discipline: ECG must tackle its revenue shortfalls urgently. This includes enforcing strict controls and minimizing system losses.

2. Minimize Political Interference: Top management should resist political pressures. Appointments must be based on competence for independent decision-making.

3. Tie Executive Compensation to Performance: Management pay should be performance-based with accountability measures in place.

4. Promote Citizen Engagement and Ownership: Public education is vital for understanding challenges and supporting solutions.

5. Revise the Cash Waterfall Mechanism: ECG should retain more internally generated funds for reinvestment in infrastructure.

6. Enable Strategic Investment of Revenue: Allow ECG to invest revenue in secure financial instruments for additional income.

7. Address Forex Exposure Risks: Transition power purchase agreements to cedi-denominated contracts or stabilize the cedi.

8. Fix Systemic Inefficiencies Across the Value Chain: Identify inefficiencies from generation to distribution to avoid privatization needs.

9. Live Within Operational Means: ECG must operate within its revenue envelope with tighter fiscal discipline.