Former ECG Managing Director Opposes Government’s Push to Privatize ECG
The former Managing Director of the Electricity Company of Ghana (ECG), Samuel Dubik Mahama, has firmly opposed the government’s proposal to privatize the state-owned power distribution company. According to him, privatization is unnecessary as private sector participation is already active in certain operational aspects of the company, such as metering.
Speaking during an interview with Bernard Avle on The Point of View on Channel One TV, Mr Dubik Mahama shared insights into his tenure at ECG, highlighting areas of success and inefficiency within the company while offering improvement solutions.
Privatization Debate: Is It Necessary?
The Energy Minister-Designate, John Jinapor, reiterated during his vetting on January 13, President John Dramani Mahama’s intent to privatize ECG to enhance efficiency in Ghana’s energy sector. However, Mr. Dubik Mahama questioned the rationale behind this proposal, arguing that privatization should only occur when specific benchmarks are met.
He emphasized that ECG has already integrated private sector participation through its metering system, which has proven to be cost-effective.
“There’s already private sector participation in ECG,” he explained. “At the metering point under the loss reduction program, we involved private companies to streamline meter installation. This approach allowed us to save more than 50% of costs associated with borrowing money and administrative expenses.”
Achievements in Metering and Local Industry Growth
During his tenure, Mr. Dubik Mahama introduced policies that required metering companies to establish factories in Ghana. This move not only created jobs but also reduced ECG’s dependency on foreign capital for meter purchases.
“What we did was to encourage metering companies to set up local factories in Ghana,” he said. “We assigned them specific localities to install meters, cutting administrative costs and significantly improving efficiency. This was a form of private sector participation that worked well and saved ECG a lot of money.”
The Forex Challenge: A Major Hindrance to ECG
While highlighting ECG’s operational challenges, Mr. Dubik Mahama identified foreign exchange (forex) issues as a critical factor affecting the company’s performance.
“The main problem ECG faces is forex,” he stated. “We buy electricity from independent power producers (IPPs) in dollars but sell it in cedis. This mismatch creates a significant financial gap, as finding the requisite USD to pay IPPs while sustaining the entire value chain is a constant challenge.”
Building on a Strong Foundation for ECG’s Growth
Despite the inefficiencies within ECG, Mr. Dubik Mahama believes that the company’s foundation is strong enough to thrive without full privatization. He encouraged the government to focus on enhancing existing programs and tackling the forex issue rather than pursuing privatization.
“There are inefficiencies, but there are also efficiencies within ECG that can be built upon. Privatization isn’t always the solution. Instead, we need to focus on tackling core challenges like forex and operational inefficiencies,” he concluded.
The Way Forward for ECG
Samuel Dubik Mahama’s remarks reignite the debate on whether privatization is the best solution for addressing ECG’s challenges. With private sector involvement already playing a role in specific aspects of ECG’s operations, the government may need to reconsider its approach and explore alternative solutions to boost efficiency and ensure sustainable energy distribution in Ghana.
As Ghana’s energy sector evolves, the focus should remain on long-term strategies that strengthen local participation, reduce financial burdens, and address key challenges such as forex management. Ultimately, these efforts could lead to a more efficient and self-reliant ECG capable of meeting the nation’s energy needs.