Finance Minister Dr. Cassiel Ato Forson has strongly opposed any increase in electricity tariffs to cover the inefficiencies of the Electricity Company of Ghana (ECG). Speaking at the National Economic Dialogue on March 4, 2025, Dr. Forson stated that consumers should not bear the financial burden of ECG’s operational failures. He called for immediate reforms to fix the inefficiencies in the power sector.
Rising Debt and ECG’s Challenges
Dr. Forson revealed that ECG currently collects only 62% of the electricity it distributes, leaving nearly 40% unaccounted for due to technical losses, illegal connections, and unpaid bills.
He emphasized that the government has spent over $2.1 billion in bailouts over the past two years to sustain the power sector. Despite these efforts, Ghana’s energy sector faces a projected financial deficit of over $9 billion by 2026. He described the situation as a ticking time bomb that could destabilize the economy if not addressed.
Key Issues Affecting ECG
Dr. Forson highlighted three major challenges within ECG:
- High Distribution Losses: ECG loses a significant portion of its power supply due to outdated infrastructure and inefficiencies.
- Non-Payment of Bills: Government institutions and private consumers owe large sums, weakening ECG’s revenue collection.
- Poor Financial Management: ECG struggles to pay independent power producers (IPPs), creating a chain reaction of debt in the energy sector.
Dr. Forson warned that unless urgent reforms take place, ECG’s inefficiencies will continue to drain national resources and limit economic growth.
No Justification for Higher Tariffs
The Finance Minister firmly rejected the idea of raising electricity tariffs to compensate for ECG’s inefficiencies.
“Consumers cannot be forced to pay higher tariffs to cover ECG’s failures. Instead, we must fix the root causes, poor billing systems, high losses, and weak financial management,” he stressed.
He further stated that the government is focused on improving ECG’s performance rather than allowing mismanagement to burden consumers.
Urgent Reforms Proposed
To restore financial stability in the energy sector, Dr. Forson proposed the following urgent reforms:
- Improving Revenue Collection – Enforcing strict measures to recover debts from both government agencies and private consumers.
- Reducing Energy Losses – Upgrading infrastructure and investing in smart metering systems to prevent theft and technical losses.
- Enhancing Financial Accountability – Ensuring ECG follows responsible financial practices to settle debts and improve cash flow.
- Expanding Renewable Energy – Promoting solar, wind, and hydro projects to reduce reliance on costly thermal power generation.
Dr. Forson made it clear that these reforms must be implemented immediately to prevent further economic strain.
Demand for Accountability
The Finance Minister emphasized the need for strict performance benchmarks for ECG. He insisted that any institution receiving government support must be held accountable for efficiency and results.
“If ECG is to continue receiving financial assistance, it must show clear improvements in service delivery, cost control, and revenue management,” he asserted.
A Critical Moment for the Energy Sector
Dr. Forson’s remarks mark a turning point for Ghana’s power sector. His call for transparency and urgent reform has sparked widespread discussion on whether ECG can be restructured or if it will continue to drain government resources.
With electricity being a key driver of economic growth, the effectiveness of ECG’s reforms will have a long-term impact on businesses, consumers, and the nation’s financial stability. The coming months will determine whether the power sector moves toward recovery or deeper crisis.
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