Economic Dialogue Endorses Government’s Plan to Privatize ECG Operations

As reported by the New Republic: The recently concluded 2-day National Economic Dialogue (NED) saw participants expressing support for the government’s proposal to privatize a portion of the operations of the financially struggling Electricity Company of Ghana (ECG).

The move is deemed necessary to address operational inefficiencies and boost revenue generation in the energy sector.

During the deliberations, Energy and Green Transition Minister John Jinapor revealed that the energy sector’s outstanding liabilities have surged to GHc80 billion, illustrating a pressing financial dilemma.

In response, the NED attendees called for a comprehensive review of ECG’s operations and the implementation of essential reforms to pave the way for potential private sector involvement.

Emphasizing the importance of enhancing operational efficiency and service delivery, stakeholders recommended strengthening ECG’s billing and collection systems, along with enforcing cost-cutting measures.

They underscored the need for cautious consideration of the private sector involvement, drawing lessons from past controversies such as the PDS scandal under the previous Akufo-Addo administration.

Additionally, the dialogue urged the government to finalize the review of Independent Power Producers (IPP) contracts, suggesting renegotiation of terms to reduce power purchase costs and bolster financial sustainability in the sector.

However, the government’s privatization plan faced opposition from the Public Utility Workers Union (PUWU), which criticized the lack of consultation with key stakeholders, including the union.

In a statement, PUWU vowed to resist any attempts to privatize ECG, asserting their commitment to safeguarding worker interests and upholding state ownership of the company.

Former Ghana National Petroleum Corporation (GNPC) CEO Dr. Kofi Kodua Sarpong lent his expertise to the dialogue, advocating for private sector participation as a means to enhance efficiency, revenue collection, and financial stability in the power sector.

Dr. Sarpong proposed the widespread implementation of prepaid meters to boost revenue collection significantly, citing potential benefits of boundary metering to combat illegal power consumption.

Regarding ECG’s mounting debt burden, Dr. Sarpong recommended the establishment of a specialized funding mechanism to address legacy debts.

He suggested exploring options such as leveraging ECG equity in physical assets or engaging in joint ventures to raise funds for debt servicing.

Minister John Jinapor reiterated the government’s commitment to private sector involvement in ECG’s operations, emphasizing the formation of a committee comprising experts and stakeholders to ensure transparency and local participation.

He clarified that the initiative aims to enhance efficiency and improve service delivery, dispelling notions of ECG’s outright sale.

In conclusion, the dialogue highlighted the urgency of addressing the energy sector’s challenges through strategic reforms and responsible private sector engagement to secure a sustainable future for Ghana’s energy landscape.