Senior Research and Policy Analyst Smith Prosper Boahene of the Institute for Energy Security (IES) cautioned that boosting electricity tariffs may not address the operational challenges facing the Electricity Company of Ghana (ECG). He said the debate must move beyond sentiment and focus on the policy measures required to tackle the underlying problems within the power distribution sector.
Boahene highlighted that ECG’s commercial and technical losses remain major obstacles, with losses standing at about 26% in 2025 and projected to reach 25% this year. He blamed obsolete infrastructure for the high technical losses, noting that most power transmitted through the distribution network is lost.
Commercial losses, he added, mean ECG cannot fully collect revenue from supplied electricity, affecting the sector’s ability to pay fuel supplies and meet obligations to Independent Power Producers (IPPs) under the cash waterfall mechanism.
The analyst pointed out that the government has spent over $1.5 billion clearing sector debts while still facing capacity charges and fuel arrears. He urged that any discussion of private sector participation (PSP) should focus on improving efficiency and addressing persistent losses, not equate PSP with outright privatization of ECG.
Boahene called for alternative policy interventions that enhance ECG’s operational efficiency while protecting consumers from excessive tariff hikes. He stressed the need for sustainable solutions to the financial and operational challenges confronting Ghana’s electricity distribution system.
