Ghana’s electricity sector may be showing signs of financial recovery, but the scale of its remaining losses and the proposed restructuring of the Electricity Company of Ghana (ECG) suggest that the next phase of reform will be judged less by improved accounts than by whether the utility can collect revenue, reduce waste and deliver electricity more efficiently.
An engagement between IMANI Africa’s Centre for Policy and Education (CPE) and the Ministry of Energy and Green Transition, placed these questions at the centre of discussions about the sector’s future.
The delegation, led by IMANI Africa President Franklin Cudjoe and Vice President Selorm Branttie, met Energy Minister John Abdulai Jinapor and officials of the Ministry to examine financial management, distribution performance and institutional reform.
According to IMANI’s account of the meeting, ECG’s reported after-tax losses declined from GH¢8.26 billion in 2024 to GH¢2.52 billion in 2025, representing an improvement of approximately 69.5%.
The movement is substantial. Yet it does not, by itself, establish that ECG has resolved the structural weaknesses responsible for its financial difficulties.
The extent to which the improvement reflects stronger operational performance, exchange-rate movements or other financial adjustments still requires clarification.
That distinction matters because a utility can report a narrower loss without having corrected the weaknesses in revenue collection, electricity accounting, procurement and expenditure that contribute to its financial exposure.
Better Accounts Must Translate Into Better Collections
One of the more consequential developments discussed at the meeting was an improvement in revenue declaration under the Cash Waterfall Mechanism, which IMANI said had risen from approximately 40% to full declaration.
The mechanism is important because electricity-sector revenues must be accounted for and distributed among participants across the value chain.
Incomplete declaration makes it more difficult to establish how much money is available, what obligations can be met and where payment shortfalls are occurring.
Greater transparency can therefore strengthen payment discipline and provide a clearer basis for assessing the financial position of sector participants.
However, declaration is not collection. A utility may disclose all revenue received while still failing to recover the full amount owed by customers.
Similarly, improved accounting cannot independently resolve commercial losses, electricity theft or expenditure that exceeds available resources.
The distinction is central to assessing ECG’s recovery. The relevant question is not simply whether the company’s financial reporting has improved, but whether the improvement is supported by stronger cash generation and a more sustainable operating model.
IMANI’s assessment recognises the importance of the progress while leaving room for scrutiny.
“Of course, declaring revenue is different from collecting every outstanding bill. The Ministry appears to recognise that distinction.”
The next test is whether the Ministry can demonstrate that improved declaration is translating into better collections, more predictable payments across the electricity value chain and a reduced need for financial interventions.
ECG Restructuring Could Change The Incentives
The Ministry’s proposed restructuring of ECG’s distribution operations could represent a significant change in how electricity distribution is managed.
According to IMANI, the Ministry is considering dividing operations into approximately four zones, with performance-based contracts, Ghanaian equity participation and potential investment from domestic pension capital.
The proposal is notable because it appears to move away from a single nationwide concession model towards a more segmented arrangement.
If properly designed, separate operating zones could make performance easier to measure and create clearer comparisons between operators.
That would potentially allow the government to identify which arrangements deliver stronger revenue collection, lower losses, better customer service and more efficient maintenance.
But dividing a utility into zones does not automatically create competition or improve performance. The results would depend on the design of the contracts, the quality of regulation, the allocation of commercial risks and the ability of public authorities to enforce agreed obligations.
IMANI says the proposal deserves serious consideration, while emphasising the safeguards required to protect the public interest.
“The essential safeguards must remain clear: transparent procurement, fair risk allocation, measurable performance obligations and protection of public assets.”
These conditions are particularly important if Ghanaian investors, including pension funds, are to participate.
Such investment could expand domestic ownership and mobilise long-term capital, but participation must rest on credible financial arrangements rather than an assumption that local ownership will automatically improve efficiency.
The government would also need to explain how operators would be selected, how their performance would be assessed, what happens when contractual targets are missed and how customers would be protected against poor service.
The credibility of the proposed model will ultimately depend on whether it creates enforceable accountability rather than simply redistributing responsibility.
Loss Reduction Is The Operational Test
The case for reform is reinforced by ECG’s reported distribution losses. IMANI cited 2024 system losses of 27.05%, while approximately 23% was discussed during the engagement as a possible improvement.
The newer figure requires independent confirmation and a clearly stated reporting period before it can be treated as an established result.
Nevertheless, the difference illustrates the potential importance of reducing electricity that is generated or purchased but does not translate into billed and collected revenue.
Distribution losses can arise from technical weaknesses in networks as well as commercial problems, including inaccurate billing, illegal connections and ineffective revenue collection.
The appropriate response must therefore address both the physical electricity network and the systems used to measure, bill and collect for consumption.
The Ministry’s proposed interventions include smart metering, remote consumption monitoring, transformer-level energy accounting and reduced reliance on manual cash handling.
These measures could help the utility compare electricity entering a distribution area with electricity recorded as consumed and billed.
More accurate data could make it easier to identify unusual consumption patterns, locate potential losses and direct enforcement or maintenance resources where they are most needed.
Yet technology will only deliver lasting benefits if the utility can maintain the equipment, act on the information it generates and ensure that billing disputes are handled fairly.
Installing smart meters without improving data management and customer service would leave part of the problem unresolved.
Procurement Discipline Must Outlast Individual Ministers
Financial recovery also depends on expenditure control. IMANI reported that historical ECG procurement commitments had reached GH¢9.8 billion against a budget of GH¢1.8 billion, figures that require reconciliation before conclusions can be drawn about the extent and timing of the commitments.
If confirmed and properly contextualised, the disparity would raise important questions about procurement planning, budget controls and the relationship between contractual obligations and available financing.
A utility struggling to collect sufficient revenue cannot sustainably address its financial position through better declarations alone if procurement commitments continue to outpace its capacity to pay.
The Ministry’s reported emphasis on prioritising essential expenditure is therefore relevant. But durable reform requires controls embedded in procurement systems, approval processes, financial reporting and board oversight.
IMANI’s assessment is that financial discipline should become an institutional standard rather than depend on the restraint of individual officeholders.
That is the broader governance challenge. A reform programme may begin under a minister who prioritises spending controls, but its success depends on whether those controls remain effective when leadership changes or operational pressures increase.
From Recovery To Accountability
IMANI has called for a consolidated performance report covering revenue recovery, distribution losses, transformer interventions, transmission investment, renewable-energy projects and procurement reforms.
It also proposes a 90-day accountability framework through which the Ministry could substantiate achievements, clarify outstanding questions and establish measurable commitments.
Such a framework would help distinguish announcements from verified outcomes. It could set out the baseline for each indicator, identify the responsible institution, establish deadlines and explain how results would be independently checked.
For ECG, that means moving beyond the headline reduction in reported losses to show whether collections have improved, distribution losses have declined, expenditure is being controlled and contractual obligations are becoming more manageable.
The proposed restructuring should be judged by the same standard. Its success will not be determined by the number of zones created or the amount of private capital announced, but by measurable improvements in operational performance and financial sustainability.
The Ministry’s reform agenda has identified several areas where action could produce results. The harder task is to show that the interventions work together and that progress can be sustained.
The central test for Ghana’s electricity distribution reform is therefore straightforward: can improved financial reporting be converted into collected revenue, reduced losses, disciplined spending and better service for consumers?
Until those outcomes are demonstrated, ECG’s improved figures should be treated as an encouraging development—not proof that the utility’s underlying financial problems have been resolved.
