The Ghanaian government and the International Monetary Fund (IMF) are working to accelerate private sector engagement in the Electricity Company of Ghana (ECG) in order to reduce substantial commercial and technical losses.
However, the government has ruled out an outright sale or complete privatisation, preferring instead for public-private partnerships (PPAs) and concession models.
Despite the opposition from organised labour, Dr. Theo Acheampong, a senior adviser at the Ministry of Finance, believes that private sector involvement in ECG will start by early 2027.
The Ministry of Finance’s Technical Advisor stated that the government was getting ready to proceed with ECG’s restructuring before the end of this year during a panel discussion on Joy FM’s News File program on Saturday, May 16, 2026.
According to Dr. Acheampong, “the private sector participation under ECG will happen. End of year going into early next year.”
“The unions are fully prepared and will do everything to ensure that we do not privatise ECG,” stated Dr Kwabena Nyarko Otoo, Deputy Secretary-General of the Trades Union Congress (TUC), who joined the conversation over the phone in response to Dr. Acheampong’s remark.
The TUC and its affiliates were “ready to use every legitimate means” to halt the action, he continued.
The approach does not equate to privatisation, according to the administration. The Ministry of Energy and Green Transition declared that the state would not sell ECG in a statement released on December 30, 2025.
“The approved Private Sector Participation framework is not a sale or divestiture. Rather, it involves the strategic deployment of private sector expertise through multiple concession arrangements to support and improve specific operational areas of ECG.”
The IMF stated that accelerating private sector involvement in ECG’s distribution operations remained essential for Ghana’s economic recovery in a statement dated May 15, 2026, discussing transition after announcing that Ghana had completed its Extended Credit Facility arrangement and agreed to a new 36-month Policy Coordination Instrument (PCI).
The Fund also urged changes in the power distribution industry and cautioned about the financial dangers associated with state-owned businesses.
In his contribution to the Joy FM Newsfile discussion, Godfred Bokpin, a professor of finance at the University of Ghana, stated that state-owned businesses, particularly ECG, continued to put pressure on the country’s economy.
He claims that the total yearly burden of state enterprises is almost 2.5% of Ghana’s GDP, or more than US$2 billion at current exchange rates.
“Whilst the accounting methodology would essentially take care of government central debt in its calculation, we were actually accumulating debt through these state-owned enterprises which eventually will come to the table of the Finance Minister to settle,” Prof. Bokpin stated.
Samuel Dubik Mahama, a former managing director of ECG, also discussed the company’s operating challenges.
He clarified that ECG only gets a portion of the money it receives from customers under the cash waterfall approach utilised in the energy industry.
“When you give ECG 300 million for a monthly operation, salary will take 110 away,” Mr Mahama said.
He stated that little money is left over for maintenance and infrastructure investment after deducting salaries, healthcare bills, gasoline, and operating expenses.
Mr. Mahama also questioned why, despite the fact that the Northern power Distribution Company serves the northern sector and ECG primarily distributes power in the southern and center regions of the nation, ECG bears financial responsibility for all Independent Power Producers.
He contended that ECG was being forced to bear expenses above its earning capacity because Ghana’s installed electricity generation capacity is projected to be 5,641 megawatts in 2024 and ECG’s peak demand is predicted to be about 2,700 megawatts.
“You are asking a company that is consuming 2,700 to pay a bill of 4,000-plus,” he said.
Dr. Otoo dismissed arguments that private sector involvement was warranted given ECG’s present performance.
He said that, compared to a revenue demand of about GH¢2.5 billion, the company’s monthly revenue collections had increased from roughly GH¢900 million to GH¢2.1 billion.
“There is nothing wrong with ECG continuing what they are doing, the progress they are making thus far,” he reiterated.
Dr. Otoo also mentioned Umeme Limited’s energy distribution contract in Uganda, which ran the system from 2005 to March 2025.
He maintained that throughout the concession period, many citizens found the cost of power to be prohibitive.
Source: newsthemegh.com