Ghana faces the risk of returning to “Dumsor” (persistent power outages) unless urgent reforms are made in the energy sector, according to Ben Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP). Speaking during the October 2024 IMF and World Bank Annual Meetings, Boakye emphasized the critical revenue shortfalls faced by the Electricity Company of Ghana (ECG), which could jeopardize the country’s power supply.
Currently, ECG collects about GH¢ 800 million per month, far below the GH¢ 2 billion needed to sustain its operations and obligations. This revenue gap threatens the company’s ability to purchase electricity from power producers and make essential payments to suppliers. Boakye warned that without addressing these issues, Ghana could revert to regular power outages, reminiscent of past periods of “Dumsor,” which severely impacted the economy and daily life.
Despite the rising number of customers and increased tariffs, ECG’s revenue collection remains stagnant. Boakye pointed out that the figures do not align with the company’s operational needs, indicating inefficiencies in the system. He stressed that immediate reforms are required, particularly in billing, metering, and debt recovery, to prevent financial collapse in the energy sector.
Key reforms should include improving energy distribution efficiency, combating power theft, and enhancing debt management to ensure cash flow stability. The return of power cuts would negatively impact industries, businesses, and households, leading to reduced productivity, job losses, and increased operational costs for businesses relying on consistent power.
Boakye urged the government to implement comprehensive reforms to close ECG’s revenue gap, improve tariff management, and strengthen governance within the energy sector. He highlighted that if these changes are not made, the sector will struggle to meet growing demand for reliable energy, which is essential for the country’s economic development.
