The Africa Center for Energy Policy (ACEP) has raised alarms over an impending crisis in Ghana’s power sector due to the Electricity Company of Ghana’s (ECG) inability to settle its debts to Independent Power Producers (IPPs).
In its recent communication to the president, the Public Utilities Regulatory Commission (PURC) also warned of a potential collapse of ECG as debts in the energy sector continue to rise. Addressing the media on Thursday, September 19, ACEP highlighted concerns about forex rate manipulations by ECG’s management.
Kodzo Yaotse, Policy Lead for Petroleum and Conventional Energy at ACEP, pointed out what they believe to be inflated costs in ECG’s power application contract with software company Hubtel and alleged exchange rate manipulations.
“One major issue is the manipulation of exchange rates. ECG has consistently reported exchange rates to the cash waterfall committee that are significantly higher than the interbank rates,” Yaotse explained.
He claimed that this exchange rate manipulation led to a net exchange loss of GH₵6.5 billion in 2022, up from GH₵600 million in 2021, with losses expected to reach GH₵7 billion by 2023.
Despite ACEP requesting historical exchange rate data from ECG in May 2024 under the Right to Information (RTI) Act, the company has yet to provide the requested information. Yaotse emphasized that this manipulation hinders ECG’s ability to manage its financial obligations, diverting public resources from critical areas.
In response, ACEP has called for the dismissal of ECG’s current management, citing the growing fiscal burden caused by ECG’s poor performance. The center warned that the company’s inefficiencies could undermine Ghana’s economic recovery efforts following domestic and international debt restructuring.
ACEP also recommended that PURC take a more active regulatory role over ECG, suggesting that the Commission should closely monitor the company’s revenue collection and expenditure to ensure the long-term sustainability of the energy sector.