Ghana’s power sector is currently facing a major crisis, largely driven by the Electricity Company of Ghana’s (ECG) ballooning debt and persistent inefficiencies in revenue collection.
ECG is reportedly burdened with over GHS 68 billion in debt, a figure that continues to rise due to weak governance and poor recovery of bills from consumers.
The company’s inability to mobilise adequate revenue has compromised its capacity to pay Independent Power Producers (IPPs), many of whom have not received payments for several months.
This mounting debt has heightened instability within the sector, with Karpowership, one of Ghana’s major IPPs, recently threatening to shut down its power plant due to prolonged arrears.
Amid this crisis, concerns and conversations have intensified around the new administration’s proposed plans to introduce public-private partnerships (PPPs) as a way to enhance ECG’s operational efficiency.
While the government has ruled out outright privatisation of ECG, the suggestion of PPPs has sparked both cautious optimism and public scrutiny, especially from labour unions and civil society groups.
However, President John Dramani Mahama has reaffirmed his administration’s commitment to protecting the Electricity Company of Ghana (ECG) from privatisation, even as the state power distributor grapples with what he described as a crippling debt crisis and systemic inefficiency.
In a candid address on the state of the power sector, President Mahama disclosed that ECG is currently saddled with a staggering debt of GHS 68 billion, warning that failure to act decisively could trigger the collapse of Ghana’s entire energy infrastructure.
“Ladies and gentlemen, the ECG has been brought to its knees by a culture of poor governance over the last eight years, with a debt of 68 billion Ghana cedis and rising. If we do not do something drastic, our whole power sector will collapse.”
President John Dramani Mahama
President Mahama acknowledged that the financial burden on ECG is a major threat to national energy security, and he emphasised that the solution lies not in selling off the utility, but in reforming it through partnerships that combine the strengths of both the public and private sectors.
He made it unequivocally clear that his administration has no intention of handing ECG over to private ownership.
“Let me assure you that it’s not my intention to privatise the ECG as an institution. Our attention is more on a public-private collaboration to inject efficiency into our downstream electricity distribution system.”
President John Dramani Mahama
ECG’s Inefficiencies Driving High Tarrifs
President Mahama highlighted that the inefficiencies within ECG, particularly in distribution, are a major reason for the high cost of electricity in the country. “We can only bring down power tariffs if we improve efficiency in the distribution of power,” he said.
To bolster his case for reform through partnerships, the President pointed to a successful precedent from his first tenure in office.
He cited the example of Enclave Power Company, a private firm that was granted the right to handle metering and billing in Ghana’s Free Zones Enclave, while ECG continued to supply bulk power.
According to President Mahama, Enclave Power has consistently paid ECG on time for the power it receives, and the company has achieved a remarkable 99% efficiency in billing and revenue collection.
A proof, he said, that well-structured collaboration with the private sector can deliver results without compromising state ownership.
“They have been paying the electricity company until today. They still pay the electricity company monthly on time. This is an existing example, and I’m sure that we can make our electricity distribution more efficient through public-private partnerships.”
President John Dramani Mahama
He again reiterated, with emphasis, that ECG would not be sold. “But I can assure you—and read my lips for emphasis—the Electricity Company as an institution will not be privatised.”
The President’s speech comes at a time when concerns over the sustainability of Ghana’s power sector are intensifying.
His call for a public-private partnership approach is expected to shape the government’s broader power sector policy in the coming months.
His position strikes a balance between retaining public ownership of critical infrastructure and drawing on private sector expertise to fix deeply rooted inefficiencies.
President Mahama’s policy direction could set the tone for how Ghana addresses the long-standing tension between state control and market-driven solutions in the energy sector.
Citing job security and national sovereignty, labour unions and civil society organizations that have traditionally opposed attempts to privatise ECG are also likely to feel reassured by his speech.
Since industrial development and economic stability are directly correlated with the health of the energy sector, President Mahama’s firm position and suggested reforms could be a game-changer in the fight to rebuild trust in ECG and guarantee Ghanaians have access to reliable, reasonably priced electricity.
As the administration proceeds with its recovery plan for the energy sector, it is expected that it can execute public-private partnerships that provide accountability and efficiency without giving private interests control over ECG.
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