ECG MD Blames Ghc10.21 Billion Loss In 2022 On Cedi Depreciation

The Electricity Company of Ghana (ECG), the entity responsible for power distribution in the southern part of Ghana, has blamed the Gh¢10.21 billion losses recorded in 2022 on the depreciation of the local currency Cedi against the US dollar.

The 2022 loss is very significant compared with the Gh¢1.91 billion loss it recorded in 2021.

Answering questions at the Public Accounts Committee of Parliament on Monday, August 12, 2024, the Managing Director of the Electricity Company of Ghana, Samuel Dubik Mahama explained the reasons for the loss and among the reasons he cited were payments to the IPPS in foreign currency as well as the purchasing of meters, transformers and other components in dollars.

The Member of Parliament for Buem, Kofi Adams, noted that the financial performance of ECG for 2022 did not look good if compared to the 2021 report.

The legislator indicated that the company’s distribution expenses rose to 32.6 per cent and administrative expenses also saw a rise of 36.3 per cent.

However, responding to the issue raised by the legislator, Mr Samuel Dubik Mahama explained that “our distribution cost going up is as a result of the forex.

Most of the jobs that we do within ECG are all priced in US dollars.

The meter, transformer purchase and other intensification jobs are all priced in dollars. The ECG now pays the IPPS and that is also done in dollars from its current jobs.”

Mr Mahama acknowledged the challenges some consumers are facing about billing but said the company is expanding its engagements in communities within the regions to educate consumers.

“We have engaged a few communities in the Volta and Central Regions, but we need to expand it and also intensify it. What we are realising now is that most people don’t know that meters expire.

“They don’t have a long lifespan and it’s something that is not the fault of the customer so it’s something that we have to educate them on,” he said.

He further explained that “…now we have moved to meters that are properly electronic so with this, when you are charging your phone, it sees everything.

“So every single action you take will reflect, and let’s not forget that the PURC has increased tariffs to about 75 per cent and the whole conversation about electricity conservation must be brought back because the mere fact that there is no plug-in the wall socket doesn’t mean that you should leave it on because it’s reading.”