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    Ghana: Power company ECG disconnects state bodies over $480m debt

    March 31, 2023 - The Africa Report


      Ghana's major power distributor Electricity Company of Ghana (ECG) is on a massive nationwide disconnection spree primarily targeting state institutions owing a cumulative amount of $478,733,166 (GHC5.7bn).

      ECG said it is going to be ruthless during its 30-day revenue mobilisation exercise as it pursues defaulting public and private customers including mining and manufacturing firms, who are the biggest debtors.

      'Pay up or get disconnected. We are not showing any mercy. No one is untouchable,' Samuel Mahama, the managing director of ECG, tells The Africa Report.

      Mahama is leading the special taskforce made up of top managers and staff of ECG and the police to recover the debt. The operation is already bearing some fruit.

      The culprits

      The taskforce disconnected power supply to a police barracks in Accra on Tuesday, 28 March, due to an illegal connection, Laila Abubakari, who is in charge of external communications for the power distributor, confirmed in an interview with The Africa Report.

      'When we got there, we realised that they have been enjoying power without [a] metre, which is not right. It's a case of illegal connection so we disconnected them. Before we put them back on the national grid, the police will have to come to our office and settle a bill covering a period of 12 months,' says Abubakari.

      READ MORE Manufacturing, not assembling should drive Ghana's EV revolution - Mana Mobility's Larbi

      To avoid being disconnected from the national grid, Parliament House immediately issued a cheque of $713,900 to settle part of its $1,091,847 debt to the ECG. The Ghana Airports Company Limited, managers of the main Kotoka International Airport in the capital, Accra, has also paid $2,351,671 as part payment of its undisclosed arrears when the taskforce stormed their premises to disconnect power to the airport.

      The leading steel manufacturing company in Ghana and West Africa, B5 Plus Group in the harbour city of Tema, had to cough out $1.6m to clear its debt to also avoid total blackout.

      Ghana Broadcasting Corporation, the state broadcaster in charge of Ghana Television and regional state radio networks, also owes the ECG an amount of $487,441 and has promised to settle the debt in the coming weeks.

      In Ghana's Volta Region - 158km drive from Accra - a number of entities were disconnected from the national grid over non-payment:

      Ho Airport ($5,291 debt)

      Ghana Revenue Authority ($4,619 arrears)

      Customs Excise and Preventive Service ($6,719 arrears)

      US-based fast food chicken restaurant chain KFC ($5,711 sum unpaid)

      A critical facility, such as a routine immunisation vaccine storage in the region, was not spared over non-payment of bills.

      'These are debts owed [to] ECG from August 2022 to February 2023,' says Abubakari. 'The exercise has been smooth so far and we're going to be friendly, but firm, to retrieve our money.'

      Multiple media reports indicated that the ECG was daring enough to cut the Energy Ministry - its supervisory body - off the national grid on the first day of the exercise. The ministry has denied the reports, saying its metres are prepaid and there was no way it could have been in arrears to ECG.

      'That's not true. At no point in time [was] the ministry […] disconnected. We're on prepaid and what happened was that we had a recharging issue and had to call in officials of ECG to come and fix it for us,' Kofi Abrefa Afena, a communications specialist at the energy ministry, tells The Africa Report.

      For his part, Mahama says he will not allow the issue with the energy ministry to overshadow the objective of the exercise.

      'We've resolved the issue. Whatever it is, the problem has been solved through dialogue. Let's move on. We have the full backing of the ministry in this exercise and that's most important,' Mahama says.


      As a government appointee, Mahama knows his job is at risk as he will step on big toes in this ambitious exercise to save a company he has been tasked to make viable. However, he says the exercise will carry on unabated irrespective of the consequences ahead.

      'I keep receiving threatening calls,' Mahama says. 'But why will you call to threaten me, when you know what is right. I am not afraid. People threatening me on behalf of others should rather encourage defaulting customers to pay their debts.'

      The power company is on the verge of near-collapse due to insolvency challenges, wastefulness and revenue leakages leading to corruption among staff. Most of its equipment such as power transformers are overloaded and obsolete.

      ECG has had challenges with maintenance and operations over the years leading to intermittent power cuts in most areas. Most of its sub-stations need to be upgraded while more must be built for efficient service delivery.

      READ MORE Tullow Oil struggles to convince on Ghana-reliant debt-reduction plans

      With a population of approximately 31 million, the power company, operating mainly in the southern sectors of the country, has 4.5 million as its customers - two million are on prepaid metres and 2.5 million of whom pay monthly. ECG has to contend with a lot of illegal connections in the system as some customers also bypass metres to avoid paying bills.

      'We can't let ECG die. We are at a point where we all have to be responsible, and for some weird reason, it is so difficult for us to be responsible. We always think that somebody needs to prompt us,' Mahama says.

      'We all know the right thing, it's just sad that we choose not to do the right thing.'

      Moves to privatise ECG

      Governments have over the years attempted to privatise the operations of the power company to make it more efficient and solvent. The latest was in 2019 under the current Akufo-Addo government, but the deal was short-lived. The government terminated the Power Distribution Services (PDS) contract after it discovered the payment guarantees were invalid. PDS was created to partly privatise and to restructure the ECG.

      The government has the option to either revisit the privatisation possibility or introduce technology that will aid in revenue mobilisation, says Adam Yakubu, research and policy analyst at the Institute of Energy Security (IES).

      'I was disappointed that Parliament was a culprit when they should lead by example. If these institutions such as ECG were privatised we wouldn't get there because a private person won't wait for you to owe him that much,' Yakubu tells The Africa Report.

      Going digital

      'ECG must be commended for doing this. It will help bring down its debt. They need to be consistent in revenue collection. The managers of ECG must pursue the digitisation drive vigorously. We are in an era of technology, so why don't you invest in it to make payment convenient for customers?'

      Mahama totally agrees with Yakubu's suggestions.

      'The government back in the day was thinking about going prepaid. The government was hoping to have some huge cash flow, to change all metres to prepaid, but that didn't happen. We currently have an app for payment. There have been a few challenges, but we'll get there as we go through a tremendous digital phase,' Mahama says.

      'For those who think this is just going to be a flash in the pan, we'll disappoint them. We'll come at you every month until the last penny owed us is paid,' he adds.


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