Samuel Dubik Mahama, former Managing Director of the Electricity Company of Ghana (ECG), has defended reforms implemented during his tenure, highlighting progress in revenue generation, digitalization, and metering. His defense comes as the International Monetary Fund (IMF) renews calls for increased private sector participation in ECG to tackle persistent financial and operational issues.
IMF Concerns and Reform Push
The IMF’s position was reiterated during a recent mission to Accra (April 29 – May 15) for the sixth review of Ghana’s Extended Credit Facility program. The fund’s staff, led by Ruben Atoyan, warned that deep-rooted inefficiencies in the energy sector continue to pose a threat to public finances and economic stability.
In a statement following the mission, the IMF emphasized the need for stronger reforms not only in the energy sector but also in the cocoa sector.
Mahama’s Defense of Reforms
Speaking on Newsfile on May 16, Mahama outlined the measures introduced during his leadership, asserting that ECG had begun to reverse long-standing revenue and operational challenges.
He stated that ECG’s monthly revenue performance significantly improved under his watch. “When I took over ECG, ECG’s revenue was nowhere near GH¢900 million,” he recalled, noting that monthly figures later reached between GH¢500 million and GH¢700 million, and eventually higher.
Mahama acknowledged that this financial improvement led to increased public expectations regarding the company’s cash flow and operational capacity. “Typical Ghanaian life — when your monies start going up, expectations are on you,” he remarked.
He described balancing operational sustainability with demands for increased financial performance as a key management challenge. “I needed to control expectations to be able to run the company,” Mahama explained.
He clarified that the assumption that the entire improved revenue could be immediately allocated to operational expenditure was a misconception. “But everybody believes that so far as you are getting that whole GH¢1.5 billion, you should bring the whole GH¢1.5 billion into the cash flow,” he stated.
Digitalization and Loss Reduction
Mahama attributed much of the revenue improvement to a loss reduction program that incorporated digitalization reforms. These reforms aimed to enhance collection efficiency and transparency.
“We had the loss reduction programme, under which we had the digitalisation process which made collections very efficient,” he said. He asserted that the collection systems became clearer and easier to monitor during this reform process.
“The picture on collection is clear, there is no corner about it,” Mahama added.
New Metering Model and Private Sector Participation
A significant reform highlighted by Mahama was the introduction of a new metering model based on private sector participation, which aligns with the IMF’s current recommendations.
Previously, ECG relied on government budget allocations for direct meter purchases. “Initially, on your budget they will tell you, you are buying 30,000 meters or 40,000 meters this month,” he explained.
The revised model required metering companies to establish local operations in Ghana and install meters before receiving payment from ECG. “What we changed it into was that every metering supplier or every metering company should have a company in Ghana,” he stated.
Under this new system, upon installation and successful integration into ECG’s system, the meters would begin generating revenue, triggering payment to the supplier. “The moment your factory is done, we give you an area, you meter the area, the meter is installed, and when it is installed and captured in our system and it starts making money, that is when we pay you,” Mahama explained.
This arrangement shifted ECG from a traditional procurement model to a performance-based system rewarding actual delivery and efficiency. “So we moved away totally from the basic procurement,” he added.
Addressing Meter Shortages
Mahama also disclosed that by the time he left office, ECG had significantly reduced the nationwide shortage of electricity meters. “It is supposed to still be in place. Before I was leaving, at that point there was no meter shortage at ECG,” he revealed.
ECG was installing approximately 100,000 meters monthly to address the metering gap. “We were doing about 100,000 meter installations a month,” he said. “So we were very ambitious in trying to close the gap because the metering gap was huge.”
The lack of adequate metering has historically contributed to estimated billing issues, revenue leakages, and customer dissatisfaction within Ghana’s electricity sector.
Sustaining Gains
While outlining the progress, Mahama acknowledged that continuous investment in materials and infrastructure is crucial for sustaining revenue growth and operational efficiency. “One of the things that we saw in doing that was that to be able to close that gap, if you don’t have the requisite materials in place, it will not drive or the revenue will plateau,” he concluded.
Looking Ahead
The IMF’s continued emphasis on private sector participation suggests that Ghana’s energy sector reforms will likely focus on attracting and integrating private capital and expertise. The success of performance-based models, like the one implemented for metering, may serve as a blueprint for other areas within ECG’s operations. Stakeholders will be watching to see if these reforms can lead to sustained improvements in efficiency, revenue collection, and customer satisfaction, ultimately bolstering the country’s economic stability.
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