Sack ECG Management, Audit Exorbitant Power App Contract- ACEP

The Africa Centre for Energy Policy (ACEP) is advocating the immediate the dismissal of the management of the Electricity Company of Ghana (ECG) for its incompetent management of affairs with mounting revenue losses.

According to the energy tink-tank, the current management has superintended over revenue losses for a long time, stating that , ECG’s losses have increased from GH¢295 million to GH¢9.7 billion between 2017 and 2022 due to questionable procurement practices, and overall failure to operate with a business-oriented mindset.

Policy lead on petroleum and conventional energy at ACEP, Kodzo Yaotse, who made the call during a press conference on Thursday, September 19, 2024, described the situation as a ticking time bomb if no immediate action is taken.

“The growing fiscal burden imposed on the economy by ECG’s poor performance has become a ticking time bomb that can undermine the progress made after the domestic and international debt restructuring to keep Ghana solvent.

“With the level of debt accumulation and the intervention required of the state, it is just a matter of time before Ghana is plunged into another debt crisis. With IPP debt mounting and gas suppliers and transporters demanding payments, the pressure on the government to sacrifice social investment is high.”

Despite public relations campaigns painting a rosy picture, ECG’s financial performance tells a different story.

Recent data from the Public Utilities Regulatory Commission (PURC) also indicates that ECG’s revenue collection rate averaged a meagre 43% between August 2023 and July 2024. For many months during this period, the collection rate dropped as low as 34%.

“This poor performance raises serious doubts about ECG’s much-touted digitalization efforts, especially the introduction of the ECG PowerApp in January 2023. Rather than solving problems, the app has worsened revenue collection,” Yaotse added,

A recent PwC audit revealed that ECG still operates 61 accounts through 16 different banks, despite a directive from the PURC and the President to consolidate collections into a single account. This lack of transparency has left auditors, regulators, and the public in the dark.

ECG is flagrantly abusing regulations and has become ungovernable. The PURC is literally begging for transparency,”

Mr Yaotse decried the phenomenum of continues intervention of central government in paying debts accumulated by ECG and urged the need to end the wasteful use of state resources.

“The political lethargy to enable ECG to deliver value to the people of Ghana continues to hurt Ghana’s budget and, by extension, development efforts. The Energy Sector Recovery Programme (ESRP) estimates that realised power sector shortfalls between 2019 and 2023 were about US$8.25 billion.

“This is a sheer waste of public resources that cannot persist. In light of the above.”

ACEP also called on the regulator, PURC sit-up with its mandate and assume its regulatory functions over ECG in check-mating how much revenue is collected and share to the value chain as required by the price waterfall mechanism.

It also called for an audit of a sole source power app contract with Hubtel in which ECG has committed very huge amounts despites its indebtedness to the value-chain.

By: Christian Kpesese