Kodzo Yaotse, the Policy Lead for Petroleum and Conventional Energy at the Africa Centre for Energy Policy (ACEP), asserts that the assessments of Ghana’s power sector over the past 15 years identify the distribution sector, specifically managed by the Electricity Company of Ghana (ECG), as the primary issue.
Comprehensive evaluations from Power Africa, the World Bank, and the IMF unequivocally pinpoint ECG’s distribution inefficiencies as the root cause of the sector’s challenges.
Yaotse has raised serious concerns about the persistent inefficiencies within ECG, which are systematically undermining the power sector in Ghana.
He emphasized that ECG’s poor revenue collection and management shortcomings have significantly exacerbated the country’s mounting power sector debt.
At a recent training workshop for journalists, he asserted, “The problem is simple: ECG does not collect enough. That’s the biggest problem.”
He underscored the alarming trend of ECG’s losses, which soared from GH¢300 million in 2017 to an astonishing GH¢9.7 billion in 2022, driven by substantial revenue and foreign exchange losses.
The ECG’s revenue collection has consistently fallen short of expectations, creating a significant gap between power consumed and money collected. According to Yaotse, ECG’s revenue collection remains critically low.
“The audit reports show that ECG collects about GH¢850 million monthly, while it’s supposed to collect around GH¢2 billion. That’s just 43% of the required revenue,” he explained.
He noted that the shortfall leaves the government responsible for covering the remaining 57%, contributing to the annual GH¢1.5 billion in power sector losses.
Despite significant power sales and tariff increases over the last year, ECG’s revenue collection has barely improved.
“We’ve seen power sales increase from GH¢700 million to GH¢1.3 billion and tariffs have risen by over 100%. Yet, the gap between power sales and collections continues to widen,” Yaotse revealed.
He slammed the narrative that ECG’s revenue collection has doubled, labelling it false: “They claim they’ve doubled revenue, but their data, audited by KPMG, shows otherwise. At best, the average monthly collection has increased from GH¢600 million to GH¢850 million. Considering the tariff increases, this is marginal at best.”
Yaotse also stressed the negative impact of high tariffs, which are driving consumers to find illegal ways to bypass meters and indicated that when the tariff becomes too high, people look for ways to avoid it.
The Energy analyst pointed out that the revenues collected by ECG are not properly accounted for further exacerbating an already depressing situation.