The Ghanaian government’s ongoing discussions on the potential privatization of the Electricity Company of Ghana (ECG) have ignited significant debate, drawing strong resistance from labor unions, political parties, and civil society organizations.
While the government views privatization as a means to address financial inefficiencies and operational constraints within ECG, critics argue that such a move could lead to increased electricity tariffs, job losses, and weakened public control over a critical national asset.
The Trades Union Congress (TUC) Ghana and the Public Utility Workers Union (PUWU) have been vocal in their opposition to any form of private sector participation in ECG.
The Unions contend that the root causes of ECG’s struggles stem from political interference, mismanagement, and ineffective revenue collection, rather than state ownership itself.
“The problems of ECG are well known, and they are not due to public ownership.
“They stem from political interference, poor governance, and structural inefficiencies that have been deliberately cultivated over the years.”
Trades Union Congress (TUC) Ghana and the Public Utility Workers Union (PUWU)
The unions argue that political interference in ECG’s procurement processes has led to inefficiencies. They claim that government appointees often dictate procurement decisions, forcing ECG to use substandard materials and equipment.
The Ghanaian government, through the Ministry of Finance and the Energy Ministry, has been pursuing the privatization of ECG as part of broader reforms in the energy sector.
For the government, privatization represents an opportunity to address the challenges of electricity theft, inefficiencies in billing and collections, and the need for significant capital investments to modernize the country’s aging infrastructure.
By inviting private investors into the sector, the government hopes to leverage their expertise, innovation, and access to capital to improve the country’s electricity distribution system.
This initiative is also seen as a means of improving Ghana’s creditworthiness and economic outlook by reducing the fiscal pressure on the government.
The government recently inaugurated a seven-member committee on January 24, 2025, to explore models for private-sector involvement. However, labor unions view this as a pretext for outright privatization.
“Let’s be clear: private sector participation is just privatization in disguise.
“We’ve seen this movie before, and we know how it ends—with job losses, higher tariffs, and compromised national interest.”
Trades Union Congress (TUC) Ghana and the Public Utility Workers Union (PUWU)
International Perspectives
Globally, the privatization of state-owned electricity companies has been a common practice, with mixed results.
In many developing countries, privatization has been touted as a way to improve efficiency and attract investment, but it has often faced significant opposition due to concerns over higher costs and job security.
For instance, in countries such as the UK and some parts of Latin America, privatization has led to improved infrastructure and service delivery.
However, in other cases, such as in parts of Sub-Saharan Africa, privatization has led to a rise in tariffs without corresponding improvements in service, contributing to public discontent.
The experience of other countries has highlighted the importance of creating regulatory frameworks that protect consumers, ensure transparency, and guarantee the continued provision of affordable services.
For Ghana, finding a middle ground that balances the need for efficiency with public welfare is crucial.
Moreover, one of the major concerns raised by the unions is the historical failure of privatization in Ghana’s utility sector. They referenced the Power Distribution Services (PDS) deal, which was abruptly terminated in 2019 due to alleged breaches of contract.
Similarly, they pointed to the failed privatization of Ghana Water Limited, which led to a deterioration in service quality and was eventually reversed in 2011.
Additionally, the unions highlighted the 2008 sale of Ghana Telecom to Vodafone as another example of failed privatization.
“Vodafone paid $1 billion for Ghana Telecom, yet in just a few years, they had repatriated five times that amount in profits while cutting thousands of jobs. Who really benefited?”
Trades Union Congress (TUC) Ghana and the Public Utility Workers Union (PUWU)
Call for Reform Instead of Privatization
Instead of privatization, the TUC and PUWU have proposed comprehensive reforms aimed at improving ECG’s efficiency while maintaining public ownership.
“We need reforms, not privatization. We need leadership stability at ECG. We need procurement processes that prioritize efficiency over political patronage.
“And most importantly, we need to protect ECG as a national asset for future generations.”
Trades Union Congress (TUC) Ghana and the Public Utility Workers Union (PUWU)
As the debate over ECG privatization continues, it is clear that the decision will have significant implications for Ghana’s energy future.
The government’s goal of improving the sector’s performance through private sector involvement may be valid, but the concerns raised by unions, civil society, and political opposition must not be overlooked.
To move forward, the government may need to consider alternative models that can address the sector’s inefficiencies without fully relinquishing public control.
Public-private partnerships (PPPs) could offer a solution, allowing the government to retain ownership while leveraging private sector expertise and capital for improvements.
Moreover, the government must engage in transparent consultations with all stakeholders to ensure that the benefits of privatization—such as increased efficiency, improved service delivery, and infrastructure upgrades—are not overshadowed by rising costs or the loss of jobs.
Striking a balance between modernization and protecting public interests will be key to achieving long-term sustainability in Ghana’s energy sector.
The battle over ECG’s privatization is far from over, with labor unions, civil society organizations, and other stakeholders continuing to push back against the government’s plans.
As the government weighs its options, the challenge remains in finding a sustainable solution that balances efficiency, affordability, and national interest.
Whether through reforms or privatization, the outcome of this debate will have significant implications for Ghana’s energy sector and the broader economy.
