Economist Professor Godfred Alufar Bokpin has warned about the scale of inefficiencies in the power distribution system.
He described the Electricity Company of Ghana’s (ECG) distribution losses as far above global averages and economically unsustainable.
Speaking on Joy News’ Newsfile on Saturday, May 17, the professor declared that ECG’s technical and commercial losses—currently hovering around 40%—are alarmingly high.
“Even if you’re doing 15%, it is very high,” he said. “But 40%? That is simply not sustainable. With that level of losses, you cannot talk about realistic pricing. You cannot pass on all those losses to the ultimate consumer.”
He made it clear that Ghana’s energy crisis keeps him up at night.
“Apart from irresponsible mining, including illegal mining, what causes me sleepless nights is the energy sector,” he said.
“We’ve seen the track records of both the NDC and the NPP, and at this point, we can no longer do politics with it. The politicisation doesn’t help. There are fundamental issues that need to be resolved.”
He said in addition to the 40% distribution losses, collection inefficiencies are also troubling.
“Collection losses are close to 15%. That’s again above the world average. It’s not sustainable.”
Professor Bokpin also pointed to pricing challenges.
“There are tariff gaps. The pricing formula does not fully reflect the costs. You cannot ignore that when you talk about viability.”
He noted that the situation is compounded by the widespread failure of government institutions to pay their electricity bills.
“We’ve heard the minister say it’s about time ministries, departments, and agencies take responsibility for their energy consumption,” he recalled.
“There are sensitive government installations, including some educational institutions and police stations, that do not pay for electricity.”
He shared a disturbing anecdote that illustrates the depth of the problem.
“Someone once asked me if I’d ever thought about where the ice blocks come from that pure water sellers use. They joked that it’s probably from police stations. I’m not saying this is true, but if this is even a possibility, then we have a big problem.”
According to him, the entire system is flawed and cannot support Ghana’s energy needs going forward.
“If you put all these things together, there is no way we can see a future in this direction,” he said.
“And yet you have a government talking about a 24-hour economy. You are not even getting power for your eight-hour economy cycle, and you’re talking about 24 hours?”
Professor Bokpin argued that the current model of managing ECG is broken and needs fundamental reform.
“We should all support government in some kind of private sector participation in the downstream distribution,” he urged.
“This is different from saying we are selling ECG. Government can still be the sole shareholder, but we must invite the private sector into power distribution and revenue collection.”
He said private participation would bring the needed capital and efficiency that the state alone cannot provide.
“On this current model, I don’t think it is sustainable,” he said.
“There are structural reforms under the IMF-supported programme that require clear indicators to be met. I know cabinet has to take a decision on ECG in terms of private sector participation, and I believe government must communicate this clearly to Ghanaians.”
He concluded with a reminder: “We are at a point where we must be honest with ourselves. The current path is not working. We need bold reforms.”
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