The African Centre for Energy Policy (ACEP) is calling for the dismissal of top management at the Electricity Company of Ghana (ECG) and an audit of the company’s contract with FinTech firm Hubtel. ACEP claims discrepancies in the contract and inefficiencies within ECG’s operations are threatening Ghana’s financial stability. At a press conference, the Centre warns that if immediate reforms are not implemented, the country risks sliding back into debt distress, undoing the progress made with debt restructuring.
A leaked letter from the Public Utility Regulatory Commission (PURC) revealed that ECG is nearing bankruptcy, despite government claims of improvements due to digital payment solutions. ACEP’s findings confirm the PURC’s concerns, highlighting ECG’s underperformance in monthly revenues and its growing debt to various creditors, including Independent Power Producers (IPPs).
The Centre also criticized ECG for outsourcing its digital payment solution to Hubtel at a higher cost, arguing that it could have developed an in-house system more affordably. The financial challenges have severely impacted ECG’s operations, with delayed salary payments and difficulty in meeting administrative costs.
PURC’s report also noted that ECG’s revenues in June and July 2024 fell short of covering its obligations, with August revenues dropping below GH¢800 million, covering only 42% of required payments. Additionally, ECG owes GH¢860 million to IPPs under the Cash Waterfall Mechanism. Immediate government intervention is needed to address the situation.
