Ghana's Energy Ministry confirms that proposed private sector involvement in the Electricity Company of Ghana (ECG) is not privatisation. The government will not transfer ownership of ECG or the Northern Electricity Distribution Company (NEDCo). This statement directly addresses concerns about the future of these vital state-owned utilities.
The Ministry's Head of Communications, Richmond Rockson, explained the distinction. He stated that privatisation involves transferring ownership, which is not part of the current plan. The government aims to introduce more private sector involvement into operations without selling off assets. This approach seeks to improve efficiency and address financial challenges within the power distribution sector.
This initiative fits into Ghana's broader economic strategy to enhance public utility performance. The government has been working to stabilise the energy sector, which has faced significant financial hurdles. Previous reforms, such as centralising ECG's bank accounts, aimed to improve revenue management. These efforts are crucial for ensuring the financial health of the power sector and reducing government liabilities.
Mr. Rockson confirmed the government's stance in an interview on Joy FM's Top Story. He stated that Cabinet approved this non-ownership transfer approach in April 2025. He further noted that some private sector participation already exists in areas like electricity sales and revenue collection. The current proposal expands on these existing arrangements.
The Trades Union Congress (TUC) has previously argued that private sector participation and privatisation are essentially the same. The TUC raised concerns about the implications for ECG's operations and employees. The Energy Ministry, however, maintains its focus on resolving structural and financial issues within the distribution companies.
The Ministry cited reforms implemented since January 2025. One key reform involved consolidating ECG's nearly 50 bank accounts into a single holding account. This change significantly improved the monitoring of collected revenues. The funds now feed into the cash waterfall mechanism, which distributes money to various power sector stakeholders.
These reforms have led to better revenue management. They have also reduced payment concerns from Independent Power Producers (IPPs) and other service providers. Mr. Rockson highlighted that IPPs have not threatened to stop generation recently due to unpaid bills. He attributed this improvement partly to prudent management of the cash waterfall mechanism.
Despite these positive developments, ECG and NEDCo still face substantial revenue collection challenges. Data from the Public Utilities Regulatory Commission (PURC) shows ECG should collect about GHS 2.5 billion monthly. NEDCo is expected to collect approximately GHS 400 million each month. However, actual collections often fall short of these targets.
ECG's monthly collections have sometimes been around GHS 1.92 billion to GHS 2.1 billion. This leaves a significant gap between expected and actual revenue. The Energy Ministry argues that while reforms are yielding results, structural issues persist. Further intervention, including increased private sector involvement, is deemed necessary to close this revenue gap and ensure sustainable operations.
The government's approach seeks to leverage private sector expertise and capital. This aims to improve operational efficiency and financial viability without relinquishing state control. Stakeholders will closely monitor the implementation of these plans. The success of this strategy will impact Ghana's energy security and economic stability.