Ghana’s largest power distributor, the Electricity Company of Ghana (ECG), once considered a strategic driver of the nation’s economic growth, is now widely seen as a liability rather than an asset. Economic analysts warn that the company’s persistent financial woes, operational inefficiencies, and weak accountability structures are crippling national development.
Established in 1967 as the Electricity Corporation of Ghana by Government Decree (NLCD 125), ECG was later incorporated in 1997 under the Companies Code, 1963 (Act 179), as the Electricity Company of Ghana Limited. Today, it remains 100% state-owned. ECG serves over 80% of Ghanaians and purchases more than 90% of the power produced in the country. With a direct workforce of 6,500 and over 100,000 indirect jobs through suppliers and contractors, ECG’s operations affect the livelihoods of millions.
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A failing power giant
Why should Ghanaians be concerned about ECG’s troubles? Analysts and company insiders point to two key reasons: first, ECG’s ability to deliver reliable electricity to homes and industries; and second, its potential to generate revenue for government development programmes. Sadly, on both fronts, the company is falling short.
Behind the scenes, company officials (whose identities are protected for their safety) reveal that ECG’s financial health is deteriorating rapidly. Mounting debts are undermining its ability to supply power consistently, defeating the very rationale for its establishment. Given electricity’s centrality to economic activity, ECG’s struggles directly threaten Ghana’s growth agenda.
The company’s ballooning revenue losses have become a national concern. Experts describe ECG’s precarious state as a ticking time bomb with potentially devastating consequences. Ghana risks slipping into yet another energy crisis unless urgent reforms are implemented.
Between 2017 and 2022, ECG’s losses surged from GHS 295 million to a staggering GHS 9.7 billion, according to data from the Ghana Statistical Service. In 2024 alone, ECG lost 32% of the electricity it purchased—the highest in more than 20 years. These losses, coupled with power sector shortfalls estimated at US$8.25 billion (2019–2023), underscore a severe drain on public finances.
Burden on the state
Independent Power Producers (IPPs) and gas suppliers are demanding payment for overdue bills, forcing government to divert funds from vital infrastructure projects to cover ECG’s debts. Karpower has already drawn down US$112 million in guarantees, while the Offshore Cape Three Points (OCTP) gas partners are owed around US$400 million.
Despite multiple tariff hikes and taxes imposed on petroleum products, ECG’s inefficiencies persist. Customers—already burdened with rising utility costs—are asking tough questions: Where has the money gone? How can debts continue rising when tariffs keep increasing?
The situation is further aggravated by acts of corruption within ECG and the broader energy sector. Investigations have uncovered shady contracts, misuse of equipment, and widespread power theft. According to the Africa Centre for Energy Policy (ACEP), ECG’s under-recoveries between August 2023 and July 2024 totaled approximately GHS 13.6 billion, with a collection rate of just 43%.
From 2018 to 2023, ECG incurred cumulative losses of GHS 23.4 billion (roughly $1.5 billion), much of it from illegal connections and unpaid bills. The former Energy Minister revealed in 2022 that ECG was losing about $400 million annually to power theft.
In the Ashanti Region, for instance, illegal connections account for over 14% of ECG’s annual losses. Residents in areas like Danyame, Nhyiaeso, Adum, and Patasi blame high tariffs, the unavailability of meters, and lengthy billing delays for the rising illegalities. With costs for meter connections ranging from GHS 700 to GHS 6,720, many resort to bypassing the system entirely.
Procurement irregularities and exchange losses
Experts like ACEP’s Policy Lead, Mr. Kodzo Yaotse, argue that ECG’s core issues stem from a broken value chain and opaque procurement practices. He cites the controversial outsourcing of ECG’s payment platform—ECG PowerApp—to Hubtel Ltd under a sole-sourcing contract as a case in point.
According to ECG documents, the platform’s development cost GHS 171.8 million, with over GHS 100 million paid as cumulative service charges between November 2022 and December 2023. Hubtel also collects 0.95% of all revenues. However, conflicting reports suggest inflated figures: while ECG quotes GHS 171.8 million, Hubtel claimed in March 2024 that the system cost US$25 million (GHS 315 million), with US$12 million (GHS 151 million) paid upfront.
Worse still, revenue performance under the new app has declined. Critics argue the switch was driven by procurement interests, not efficiency. The contract gives Hubtel control over all revenues collected, delaying ECG’s access to its own funds. This undermines the transparency requirements under the IMF-backed Cash Waterfall Mechanism, intended to track ECG’s earnings.
Meanwhile, ECG has failed to comply with a Public Utilities Regulatory Commission (PURC) directive to operate a single transparent account. Instead, it maintains 61 accounts across 16 banks, many of which are hidden from auditors.
Perhaps most alarming are the exchange rate manipulations. ECG reportedly inflates rates when reporting to the Cash Waterfall Committee, resulting in artificial exchange losses of about GHS 6.5 billion in 2022 (up from GHS 609 million in 2021) and around GHS 7 billion in 2023. These inflated figures drain public resources and obscure ECG’s true financial position.
A call to action
Mr. Yaotse is calling for an immediate audit of the Hubtel contract to establish whether value for money was achieved and to clarify inconsistencies in financial reports. He insists that greater accountability and transparency at ECG are necessary for the company to meaningfully contribute to domestic resource mobilization for national development.
The current state of ECG is a wake-up call. Ghanaians are not only paying for power—they are paying the price of mismanagement, inefficiency, and corruption. If not urgently addressed, the nation risks sacrificing its development goals on the altar of institutional decay.
By Franklin Asare-Donkoh
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(Edited according to this portal’s editorial policy)