The Public Utility Workers Union (PUWU) has strongly opposed the privatization or diversification of the Electricity Company of Ghana (ECG).
PUWU argues that private control over the electricity sector could compromise public interest.
PUWU the first Labour Union to kick against the government’s move in a statement said “We cannot support any initiative that prioritizes profits over equitable service delivery,” PUWU stated.
An Energy consultant who pleaded anonymity has cautioned against privatising the Electricity Company of Ghana (ECG), calling for a more nuanced approach to solving the country’s energy challenges.
Speaking to The Ghanaian Publisher, he argued that while private sector involvement may appear attractive on paper, its track record in Africa offers little assurance of success.
“In Nigeria, the distribution sector is almost entirely privatized, yet it hasn’t gone well. Privatization initially seemed promising in Uganda, but the private sector focused only on the lucrative aspects, leaving the government to handle less profitable areas.”
“They were, in essence, mocking the government,” he noted.
He attributed a more stable electricity supply in North African countries to strong government involvement rather than privatization.
He emphasized that systemic issues, such as low tariffs, inefficiencies, and political interference, plague utilities in sub-Saharan Africa.
“Tariffs are often lower than the actual cost of production. For example, ECG collects revenue in cedis, but much of its operational costs are in dollars. Exchange rate fluctuations alone cause losses before revenue is even collected,” he explained.
He emphasized the importance of viewing electricity as a social good, cautioning against treating it solely as a profit-driven commodity.
“Electricity is essential to daily life and must be accessible to all, including the less privileged,” he said. “If privatization is pursued without careful planning, inefficiencies and costs could simply be passed on to consumers, especially in rural and low-income areas.”
He suggested that privatization could work under the right conditions but stressed the need for balanced, transparent deals that protect public interests.
“For privatization to succeed, deals must incentivize efficiency without transferring risks to the government or excluding vulnerable groups.
For instance, if electricity losses, currently at 23%, can be reduced to 15%, the benefits could be shared between the private sector and ECG,” he stated.
Dr. Elikplim Kwabla Apetorgbor, CEO of Independent Power Generators, Ghana, echoed these concerns, citing the failed Power Distribution Services (PDS) concession .
“Before privatization to PDS, ECG honoured over 80% of invoices owed to Independent Power Producers (IPPs). Afterwards, ECG ceased receiving revenue, and debts ballooned to $1.8 billion,” he revealed.
Instead of pursuing privatization, Ghana should focus on strengthening the governance structure of ECG and the sector as a whole.
Privatization may risk the accessibility, affordability, and stability of electricity services, crucial for national development.
President John Dramani Mahama recently hinted at privatization during a meeting with the World Bank, citing inefficiencies in ECG as a major concern.
He emphasized the need for private sector involvement to address financial mismanagement, operational inefficiencies, and inadequate service delivery at ECG.
Minister of Energy and Green Transition, John Jinapor, has inaugurated a seven-member committee to consult stakeholders and develop a privatization plan within a month.
“We’re not selling ECG. We aim to involve the private sector responsibly and transparently while ensuring local participation,” Mr. Jinapor clarified.