The Government of Ghana and the International Monetary Fund (IMF) are accelerating efforts to encourage private sector involvement in the Electricity Company of Ghana (ECG) as a strategy to reduce significant commercial and technical losses. While ruling out a complete sale or full privatisation, the government has instead chosen to pursue public-private partnerships (PPPs) and concession agreements.
According to Dr. Theo Acheampong, a senior adviser at the Ministry of Finance, private sector participation in ECG is expected to commence by early 2027, despite resistance from organised labour. During a panel discussion on Joy FM’s News File programme on Saturday, May 16, 2026, Dr. Acheampong stated that the government plans to proceed with the restructuring of ECG before the end of this year. “Private sector participation in ECG will take place,” he affirmed. “By the end of this year, moving into early next year.”
Responding to the comment by Dr Acheampong, Dr Kwabena Nyarko Otoo, a Deputy Secretary-General of the Trades Union Congress (TUC), who joined the discussion via telephone, said: “The unions are fully prepared and will do everything to ensure that we do not privatise ECG.”
He added that the TUC and its affiliates were “ready to use every legitimate means” to stop the move. The government has maintained that the process does not amount to privatisation. In a statement issued on December 30, 2025, the Ministry of Energy and Green Transition said the state would not sell ECG.
“The approved Private Sector Participation framework is not a sale or divestiture. Rather, it involves the strategic deployment of private sector expertise through multiple concession arrangements to support and improve specific operational areas of ECG.”
In a statement dated May 15, 2026, talking about transition when the IMF announced that Ghana had concluded its Extended Credit Facility arrangement and agreed to a new 36-month Policy Coordination Instrument (PCI), the IMF said accelerating private sector participation in ECG’s distribution operations remained necessary for Ghana’s economic recovery. The Fund also warned about fiscal risks linked to state-owned enterprises and called for reforms in the power distribution sector.
Godfred Bokpin, a Professor of Finance at the University of Ghana, contributed to the Joy FM Newsfile discussion said state-owned enterprises, especially ECG, continued to place pressure on the national economy. According to him, the combined burden of state enterprises amounts to about 2.5 per cent of Ghana’s Gross Domestic Product annually, equivalent to more than US$2 billion at current exchange rates.
“Whilst the accounting methodology would essentially take care of government central debt in its calculation, we were actually accumulating debt through these state-owned enterprises which eventually will come to the table of the Finance Minister to settle,” Prof Bokpin said.
Former ECG Managing Director Samuel Dubik Mahama also spoke about operational difficulties within the company.
He explained that under the cash waterfall system used in the energy sector, ECG receives only part of the money it collects from consumers.
“When you give ECG 300 million for a monthly operation, salary will take 110 away,” Mr Mahama said.
He said after salaries, hospital bills, fuel and operational costs are deducted, little money remains for maintenance and infrastructure investment.
Mr Mahama also questioned why ECG carries financial obligations for all Independent Power Producers even though the company distributes electricity mainly in the southern and middle parts of the country, while the Northern Electricity Distribution Company serves the northern sector.
Ghana’s installed electricity generation capacity is projected to reach 5,641 megawatts in 2024, while the Electricity Company of Ghana (ECG) faces a peak demand of about 2,700 megawatts. In this context, he argued that ECG is being burdened with costs that exceed its ability to generate revenue. “You are asking a company that is consuming 2,700 to pay a bill of over 4,000,” he stated.
Dr. Otoo dismissed claims that ECG’s current performance warrants private sector involvement. He pointed out that the company has increased its monthly revenue collections from around GH¢900 million to GH¢2.1 billion, even though its revenue requirement is approximately GH¢2.5 billion. “ECG is making tangible progress and there’s no reason they shouldn’t continue on this path,” he said.
Dr. Otoo also referenced Uganda’s electricity distribution concession with Umeme Limited, which managed the system from 2005 until March 2025, arguing that electricity tariffs became unaffordable for many citizens during this period.
Source: Mohammed Ali