Finance Minister Warns ECG Crisis Could Cripple Ghana’s Economy
Accra, March 4, 2025 – The Electricity Company of Ghana (ECG) is at the center of a deepening financial crisis, draining billions from the national budget while grappling with inefficiencies and massive revenue losses.
At the National Economic Dialogue, Finance Minister Dr. Cassiel Ato Forson described ECG’s current operations as unsustainable, warning that without urgent reforms, Ghana’s energy sector could collapse under mounting debt.
Billions Lost, Energy Sector at Risk
Dr. Forson revealed that ECG collects only 62% of the total electricity it distributes, meaning nearly 40% of power is lost or unpaid for. This alarming revenue gap has forced the government to bail out the company with $2.1 billion over the past two years.
“The inefficiencies at ECG are costing the nation heavily. Government transfers to support the energy sector have reached unsustainable levels, yet the company continues to struggle with revenue collection and operational inefficiencies,” he stated.
By 2026, the projected cumulative shortfall in the energy sector is expected to exceed $9 billion, making it one of the biggest threats to Ghana’s economic stability.
Key Challenges Facing ECG
The Finance Minister outlined the major issues contributing to ECG’s financial crisis, including:
🔹 High Distribution Losses – Power is lost due to technical faults and widespread illegal connections.
🔹 Non-Payment of Bills – ECG struggles to collect payments from both government institutions and private consumers.
🔹 Poor Cash Management – ECG fails to settle its obligations to power producers, creating a chain reaction of debt in the sector.
🔹 Unrealistic Tariffs – Current electricity tariffs do not reflect actual costs, leading to continuous financial shortfalls.
“The power sector should be a key driver of industrial growth, but instead, it has become a financial black hole, dragging the entire economy down,” Dr. Forson emphasized.
Urgent Reforms Needed to Save ECG
Dr. Forson called for radical reforms to fix ECG’s structural problems and reduce its burden on public finances. Proposed solutions include:
✅ Strengthening Revenue Collection – Enforcing strict measures to recover debts, including from government agencies.
✅ Reducing Technical & Commercial Losses – Investing in modern metering systems and anti-theft technology.
✅ Exploring Privatization or Public-Private Partnerships (PPP) – Bringing in private sector expertise to enhance efficiency.
✅ Cost-Cutting Measures – Eliminating operational waste and ensuring ECG operates within its revenue limits.
✅ Enhancing Financial Accountability – Strengthening oversight and internal controls to prevent financial mismanagement.
“We Cannot Pour Billions into a Broken System”
Dr. Forson made it clear that Ghana cannot afford to continue bailing out ECG without fundamental changes.
“If we do not act now, ECG will cripple Ghana’s economy. We cannot continue pouring billions into a broken system,” he warned.
The Finance Minister urged all stakeholders, including government agencies, private sector players, and ECG management, to commit to a turnaround plan that ensures the long-term sustainability of Ghana’s electricity sector.
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