The lights flicker in Accra, a familiar dance of uncertainty that casts a long shadow over Ghana’s ambitious development plans. Economist Professor Godfred Alufar Bokpin recently sounded a stark warning: the Electricity Company of Ghana (ECG), the nation’s power distributor, teeters on the brink of collapse. Speaking on Newsfile, Prof. Bokpin painted a picture of an unsustainable model, crippled by losses and inefficiencies, that threatens not only the current power supply but also the feasibility of Ghana’s vision for a 24-hour economy. Without urgent reforms and, crucially, private sector participation, Ghana risks plunging into a deeper energy crisis.

The core of the problem, according to Prof. Bokpin, lies in ECG’s unsustainable operational model. It’s a model, he argues, that simply cannot support the demands of a growing economy, let alone the ambitious vision of a 24-hour economic cycle. The numbers tell a grim story. Distribution losses on ECG’s books hover around a staggering 40%. To put that in perspective, even a 15% loss would be considered alarmingly high. “It’s about some 40%, which is very high,” Prof. Bokpin explained. “Even if you are doing 15%, it is very high. With that level of losses, you cannot talk about realistic pricing. You cannot pass on all those losses to the ultimate consumer.”

But the leaks don’t stop there. Collection losses, representing unpaid bills, add another layer of concern, hovering near 15%. This figure, significantly above the world average, further bleeds the system dry. A significant contributor to these unpaid bills are government institutions themselves. Ministries, departments, and agencies (MDAs) routinely fail to settle their electricity accounts, exacerbating ECG’s financial woes. As Prof. Bokpin noted, quoting a government minister, “There are ministries, departments and agencies. You heard the minister saying it’s about time they take responsibility for their energy consumption.”

Beyond the financial metrics, internal issues plague the organization. Poor procurement practices and, perhaps most insidiously, political interference, further undermine ECG’s efficiency and effectiveness. “If you put all these things together and look at internal issues with ECG, procurement, management, interference, I think we are at the point where we should all support government in some kind of private sector participation,” Prof. Bokpin stated, highlighting the urgent need for a fundamental shift in approach.

The question then arises: why has the Electricity Company of Ghana reached this critical juncture? Political interference, a recurring theme in Ghanaian governance, plays a significant role. Prof. Bokpin points out that both the ruling NDC and opposition NPP governments have grappled with similar energy sector challenges, suggesting deeply entrenched systemic issues. “They are all saying the same thing — that there are fundamental issues that need to be resolved. That gives me comfort, because we are at a stage where politicisation doesn’t help,” he said, emphasizing the need for bipartisan cooperation to address the crisis.

Inefficient management practices further compound the problem, contributing to the unacceptably high losses and overall operational inefficiencies. A lack of accountability among government institutions in settling their electricity bills adds another layer of complexity, creating a vicious cycle of debt and underperformance. Internal issues within ECG, including questionable procurement practices, persistent management challenges, and undue political interference, complete the picture of a company struggling to stay afloat.

The current struggles of the Electricity Company of Ghana raise serious questions about the feasibility of Ghana’s ambitious vision for a 24-hour economy. As Prof. Bokpin points out, the existing 8-hour economy is already strained by unreliable power supply. “Here you have a government talking about a 24-hour economy. You are not even getting power for your 8-hour economy,” he cautioned, highlighting the stark disconnect between aspiration and reality.

For Prof. Bokpin, the solution lies in private sector participation. He advocates strongly for bringing in private expertise and capital to improve power distribution and collection, but he clarifies that this doesn’t necessarily mean selling off ECG entirely. “Government can still be the sole shareholder of ECG, but we should be able to invite the private sector in the distribution of power and collection. This will require them to bring in capital and efficiency,” he explained. The potential benefits are clear: increased investment, improved efficiency, and a more sustainable operational model.

The urgency of reform is further underscored by Ghana’s current IMF-supported program, which includes clear structural benchmarks for the energy sector. “I believe there are structural reforms under the IMF-supported program with respect to how ECG ought to be managed. There are clear indicators that government has to meet,” Prof. Bokpin stated, linking the future of ECG to Ghana’s broader economic recovery efforts.

A critical decision now rests with the cabinet, which is expected to decide on the extent and nature of private sector participation in ECG. “I know cabinet has to take a decision on ECG in terms of private sector participation. Government must communicate this clearly to Ghanaians,” Prof. Bokpin urged, emphasizing the need for transparency and open communication throughout the process.

Professor Bokpin’s stark warning serves as a crucial wake-up call. To prevent the collapse of the Electricity Company of Ghana, urgent reforms and strategic private sector involvement are essential. The current model, plagued by unsustainable losses, unpaid bills, and internal inefficiencies, demands a fundamental shift. Addressing these issues head-on is not merely an economic imperative; it is crucial for Ghana to realize its development ambitions and ensure a stable, reliable power supply for its citizens and businesses. The government’s forthcoming decision, communicated with transparency and clarity, will be a defining moment for the future of Ghana’s energy sector.