John Jinapor, the Minister-Designate for Energy, has ordered the management of the Electricity Company of Ghana (ECG), to immediately suspend all payments for supplies, as part of efforts to tackle inefficiencies and stabilize the power sector.
Jinapor, issued a stern warning to ECG staff, particularly within the finance directorate, stating that serious consequences would follow if the directive is ignored.
In an interview on Eyewitness News yesterday, Thursday, January 9, 2025, Jinapor, revealed that ECG has been facing significant revenue losses.
He highlighted the challenge of managing over 70 accounts within the company, which has made effective monitoring and control difficult.
The Minister-Designate, pledged to implement comprehensive reforms aimed at streamlining ECG’s operations and improving its overall efficiency to better serve the public and stabilize the power sector.
“The challenge of money emanates from inefficiencies. Because if ECG loses over 40% of its power generated, no matter what you do, you cannot find a solution. Other countries are doing just about 2-4% losses. So, with this $100 worth of power, you buy and sell, you collect only 60% and even with that, there are so many contracts, quality assurance, IT, provision and others.
“They are all deducting monies at the source. So, I have told the ECG, and this is also an instruction from the Chief of Staff, to seize all payment for supplies and I mean it. I have told them and if anybody is listening and is within ECG, whether the finance directorate, this was the instruction we gave them yesterday.
“Please don’t and I mean it, because there are serious consequences if you flout this directive. We need some serious buffers to anchor the system. All those numerous accounts will be closed. They have over 70 accounts and they cannot monitor that, so we need to reform that sector and we will reform that sector,” he stated.
Jinapor, also stressed the importance of engaging the private sector as the only viable solution to improving the operations of the ECG and boosting revenue generation.
His comments, follow President John Dramani Mahama’s announcement on January 8, that discussions are ongoing regarding the potential privatization of power distribution in Ghana.
President Mahama, cited persistent challenges within ECG, including operational inefficiencies, financial mismanagement, and poor service delivery, as key reasons for exploring private sector participation in the sector.
Mahama indicated the possibility of privatizing the ECG as part of efforts to address inefficiencies in the country’s power distribution system.
The President believes that involving the private sector in managing ECG, could help resolve longstanding challenges, including operational inefficiencies, financial mismanagement, and inadequate service delivery.
Speaking during a meeting with a delegation from the World Bank on Wednesday, January 8, 2025, at his private office in Accra, Mahama noted that privatization may form part of a broader strategy to modernize and enhance the performance of the energy sector.
Reflecting on Ghana’s participation in the Millennium Challenge Corporation (MCC) Compact during his tenure as Vice President, Mahama emphasized the importance of efficient energy distribution in achieving the nation’s development goals.
He highlighted that any move towards privatization would focus on ensuring a sustainable energy sector capable of meeting the growing demands of Ghana’s economy.
Mahama, also assured stakeholders that decisions regarding ECG’s future would involve thorough consultations to balance public interest with the need for improved performance.
“If we don’t fix the Electricity Company of Ghana, we will continue to have a major problem with our whole power value chain. So, going ahead with privatising the last point of electricity distribution, bringing in private sector efficiency is something that we want to take up again. We want to speak with the World Bank to get the expertise to be able to do that.”
Jinapor on Eyewitness News, emphasized the urgency of addressing these issues, stating that he plans to work on a transparent framework for the proposed reforms even before his formal swearing-in.
He reiterated that involving the private sector is the only way forward to improve ECG’s system and operations.
“We don’t even want to wait until I am sworn in. We want to, as a technical team, work with some consultants with the World Bank and IMF to transparently determine the framework for how we are going to engage in the private sector.
“Especially with the billing and collection. It is either we set good KPIs go through a competitive tender process and get the best so that we can improve the systems at ECG. The truth is that we have no alternative but to involve the private sector. Where we have gotten to, it is the only option available,” he stated.
