Private involvement in ECG urgent or sector may collapse, says Prof. Bokpin

Economist Professor Godfred Alufar Bokpin warns that the Electricity Company of Ghana (ECG) is close to collapse. He says urgent reforms and private sector involvement are needed.

On Newsfile, Prof. Bokpin stated that ECG's current operations are unsustainable. They cannot support Ghana’s development goals, including a 24-hour economy.

He expressed concern about the energy sector, saying it keeps him awake at night. He believes politics should not interfere with managing this critical sector.

Prof. Bokpin noted that both the NDC and NPP governments face similar challenges in energy management. He finds comfort in their agreement on fundamental issues needing resolution.

He highlighted that ECG's distribution losses are alarmingly high at around 40%. Even a 15% loss would be excessive for realistic pricing.

Collection losses also pose a significant problem, nearing 15%. This figure exceeds the global average and is unsustainable.

Additionally, he raised concerns about unpaid electricity bills from government institutions. Ministries and agencies must take responsibility for their energy consumption.

Prof. Bokpin mentioned sensitive installations that do not pay for electricity. He questioned how Ghana can progress if these issues persist.

He doubted the feasibility of a 24-hour economy when power supply struggles affect the current 8-hour cycle.

The government talks about a 24-hour economy but fails to provide enough power for an 8-hour one.

Prof. Bokpin advocates for private sector participation in power distribution and collection without selling ECG. The government can remain the sole shareholder while inviting private investment for efficiency.

He acknowledged internal problems within ECG, such as poor procurement practices and political interference. These issues need addressing to improve performance.

He linked necessary reforms to Ghana’s IMF-supported program, which includes structural benchmarks for ECG management. The government must meet clear indicators set by this program.

Prof. Bokpin mentioned that a cabinet decision on ECG is forthcoming and stressed the need for transparent communication with Ghanaians about it.