ECG tariff increases cannot replace reforms — Afenyo-Markin

Minority Leader Alexander Afenyo-Markin has warned that repeated electricity tariff adjustments cannot resolve the financial challenges facing the Electricity Company of Ghana (ECG), calling for comprehensive reforms to improve revenue collection, reduce operational losses and strengthen financial discipline.

He said the electricity distributor must address persistent inefficiencies in its operations instead of relying on tariff increases and periodic government financial interventions to sustain its operations.

In a statement following an engagement with ECG management and former executives, Mr Afenyo-Markin argued that the company’s difficulties were structural and systemic, requiring reforms that would make it financially sustainable and operationally efficient while protecting consumers from the cost of institutional failures.

“Tariff adjustments may have a legitimate place in a properly regulated electricity market. They cannot, however, become a substitute for prudent financial management, effective revenue collection, operational discipline and institutional accountability,” he said.

Mr Afenyo-Markin made the remarks after attending a luncheon organised in honour of former ECG managing directors and board chairpersons at the Accra Marriott Hotel on Wednesday, September 23, 2026.

He was invited to the event by ECG Managing Director Kwame Kpekpena in recognition of his service as a former board chairman and his contribution to the company’s development.

Mr Afenyo-Markin was appointed board chairman in July 2024 and served from September 29, 2024, to January 6, 2025.

He said his experience during the period exposed him to the considerable operational, financial and institutional pressures confronting the company.

According to him, the key question is how ECG can deliver reliable electricity while meeting its financial obligations without continually transferring the consequences of inefficiencies to households and businesses.

He noted that successive electricity tariff adjustments between April 2025 and September 2026, including both increases and reductions, had resulted in a cumulative increase of approximately 28.7 per cent based on published average regulatory adjustments.

He said electricity pricing had direct consequences for household welfare, business production costs, employment and economic opportunities, particularly for families struggling with the cost of living and enterprises seeking to remain competitive.

“The Ghanaian consumer must not become the permanent financier of inefficiencies that the electricity sector has failed to confront,” he stressed.

ECG’s financial recovery remains incomplete

Mr Afenyo-Markin acknowledged improvements in ECG’s financial and operational performance but cautioned against interpreting the figures as evidence of a sustainable turnaround.

The company’s revenue increased from approximately GH¢19.03 billion in 2024 to GH¢22.11 billion in 2025, representing growth of 16.2 per cent.

Its reported loss after tax also declined from approximately GH¢8.26 billion to GH¢2.52 billion, an improvement of about 69.5 per cent.

New electricity connections increased by 31.3 per cent to 222,979, while prepaid customers accounted for approximately 53.5 per cent of the customer base.

However, he said the reduction in the reported loss after tax was materially supported by foreign exchange gains of approximately GH¢12.16 billion arising from the appreciation of the Ghana cedi against foreign-currency-denominated obligations.

He argued that such accounting gains should not be confused with equivalent improvements in electricity sales, cash collections or underlying operational efficiency.

ECG’s electricity purchase costs reached approximately GH¢34.8 billion in 2025, exceeding its reported revenue of GH¢22.11 billion and leaving the company with a gross loss of approximately GH¢12.7 billion.

System losses also declined marginally from 27.05 per cent in 2024 to 26.88 per cent in 2025, a reduction of just 0.17 percentage points.

Mr Afenyo-Markin said the figures highlighted the need for ECG to intensify efforts to reduce losses, improve revenue collection and control expenditure.

He called for the full implementation of the Loss Reduction Programme introduced in 2023 under the Akufo-Addo-Bawumia government to address faulty metering, outdated billing systems, illegal connections and revenue leakages.

Calls for digitalisation and stronger revenue protection

The Minority Leader identified faulty meters, inaccurate customer records, delayed billing, unbilled consumption, illegal connections and weak payment reconciliation as major threats to ECG’s financial recovery.

He cited the company’s customer base of approximately 5.85 million at the end of 2025, explaining that if 5 per cent of the accounts were affected by faulty meters, about 293,000 customers could potentially be exposed to inaccurate consumption measurement or billing.

He clarified that the figure was an illustrative scenario and not a claim that 5 per cent of ECG’s meters had been confirmed defective.

To address these challenges, he proposed a unified customer database to eliminate fragmented records and duplicate accounts, alongside smart prepaid and remotely monitored meters to improve consumption measurement and reduce opportunities for manipulation.

He also recommended Geographic Information System (GIS) mapping to identify customer locations, distribution assets and areas vulnerable to illegal connections.

Other proposals include integrated digital payment systems with automated reconciliation, artificial intelligence and data analytics to detect unusual consumption patterns, and real-time management dashboards linking metering data, billing records and customer complaints.

He said these interventions must be supported by effective data governance, cybersecurity safeguards, independent audits and clear accountability.

Mr Afenyo-Markin further called for stronger field inspections, consistent sanctions against electricity theft and meter tampering, whistle-blower protection and greater collaboration with local assemblies, traditional authorities and communities.

Three measures to address ECG’s financial challenges

Mr Afenyo-Markin proposed three priority measures to address the company’s financial obligations and the wider electricity sector’s challenges.

First, he called for strict enforcement of the revised Cash Waterfall Mechanism to ensure that electricity-sector revenues are collected, reconciled and distributed transparently according to established rules.

He said the mechanism should be supported by independently auditable arrangements, regular publication of validated collection and disbursement information, effective regulatory oversight and accountability for deviations.

Second, he urged the government to review and, where commercially and legally feasible, renegotiate legacy power purchase agreements that impose excessive financial obligations on the sector.

He identified capacity-payment obligations and inflexible take-or-pay provisions as areas requiring attention, suggesting that more flexible take-and-pay arrangements could be considered where appropriate and commercially viable.

However, he cautioned that any renegotiations must respect contractual rights, financing arrangements, investor confidence and the need to maintain reliable electricity supply.

Third, he proposed an enforceable mechanism for the timely settlement of electricity bills and verified arrears owed by ministries, departments, agencies and other public institutions.

He urged the Ministry of Finance to consider authorised monthly deductions or budgetary offsets, backed by transparent billing, verification and reconciliation procedures.

“The State cannot credibly demand financial discipline from ECG while permitting public institutions to accumulate unpaid electricity obligations,” he said.

Mr Afenyo-Markin also cited an International Monetary Fund assessment that projected an energy-sector financial shortfall of approximately US$1.1 billion in 2026, arguing that periodic bailouts could not provide a sustainable long-term solution.

Procurement reforms to protect public funds

Beyond revenue collection, the former ECG Board Chairman called for stronger procurement, inventory management and contract administration controls.

He recalled concerns about arrangements under which suppliers could present shipping documents, including bills of lading, without adequate verification that contracted goods had been delivered and accepted by ECG.

He clarified that bills of lading were legitimate international trade documents but warned that weak delivery-verification procedures could expose the company to avoidable financial risks, including delays, port and storage charges, damaged goods and disputes over contractual specifications.

He said he had led efforts at board level to strengthen the link between payment obligations and verified delivery and acceptance of goods at designated ECG facilities.

He urged the company to institutionalise independent verification, robust inventory controls, clear contractual safeguards and effective oversight to ensure value for money.

Mr Afenyo-Markin maintained that ECG’s long-term recovery depended on a combination of revenue protection, financial discipline, operational efficiency and accountable governance.

He said successful reform should ultimately produce a financially resilient and efficient electricity distributor capable of meeting its obligations and providing reliable electricity at a fair and sustainable cost, without routinely passing the burden of inefficiencies to consumers.