Energy Minister-Designate John Jinapor has taken a decisive step to reform Ghana’s power sector, directing the Electricity Company of Ghana (ECG) to immediately halt all payments for supplies. This bold move is aimed at curbing inefficiencies and ensuring financial stability within the power distribution system.
Speaking during an interview Mr. Jinapor underscored the gravity of his directive, emphasizing that it is backed by instructions from the Chief of Staff. He warned of severe consequences for non-compliance, signaling his commitment to overhauling the sector.
ECG’s Inefficiencies Under Scrutiny
Mr. Jinapor revealed that ECG’s operations are marred by significant inefficiencies, including operating over 70 separate accounts, which complicates effective monitoring and accountability. He pointed out that ECG loses more than 40% of the power it generates—an alarming figure compared to the 2-4% losses reported in more efficient power sectors globally.
“The challenge with revenue stems from inefficiencies. If ECG loses over 40% of its generated power, no amount of investment can resolve the issue. In contrast, other countries experience just 2-4% losses. Here, for every $100 worth of power generated and sold, ECG collects only 60% of its value. The rest is lost due to inefficiencies, contract deductions, and operational flaws,” Mr. Jinapor explained.
He further highlighted that deductions from ECG’s revenue are siphoned off through various contracts, including quality assurance, IT systems, and supply provisions, significantly draining the company’s finances.
Directive to Halt Payments
In response to these challenges, Mr. Jinapor ordered ECG to suspend all supply payments immediately. “This is a directive from the Chief of Staff, and I have personally reinforced it. Any staff within ECG, including those in the finance directorate, must adhere to this instruction,” he stated emphatically.
This intervention is seen as a strategic move to create a buffer for the company while comprehensive reforms are implemented. Mr. Jinapor’s stance reflects a broader push to enhance financial discipline and operational efficiency in Ghana’s power sector.
Privatization Talks on the Horizon
The directive comes in the wake of President John Mahama’s announcement on January 8, 2025, about ongoing discussions regarding the potential privatization of power distribution in Ghana. The President expressed concern over ECG’s persistent revenue losses, attributing them to operational inefficiencies, poor service delivery, and financial mismanagement.
Mr. Jinapor’s directive aligns with the government’s broader agenda to reform the energy sector and restore public confidence in the ECG. By tackling inefficiencies head-on, the Minister-Designate aims to reposition ECG as a more accountable and financially viable entity, potentially paving the way for privatization and modernization in the near future.
Story by: Mercy Addai Turkson
