John Jinapor orders ECG to suspend supply payments

John Jinapor, Ghana’s Energy Minister-Designate, has directed the Electricity Company of Ghana (ECG) to immediately suspend all payments for supplies as part of measures to address inefficiencies and stabilize the country’s power sector.

Speaking in an interview on Citi FM, Mr. Jinapor emphasized that the directive is non-negotiable and warned of severe consequences for non-compliance. He explained that the move is essential to create buffers and strengthen ECG’s operations, which have been plagued by significant inefficiencies and revenue losses.

Highlighting the scale of the challenges, Mr. Jinapor revealed that ECG operates more than 70 bank accounts, making effective monitoring nearly impossible. He called for comprehensive reforms to address these systemic issues.

ECG, according to the Minister-Designate, loses over 40% of the power it generates—a stark contrast to the 2-4% loss rates recorded in other countries. He underscored the impact of these losses, stating, “The challenge of money emanates from inefficiencies. If ECG loses over 40% of its power, no matter what you do, you cannot solve the problem. In other countries, they lose just about 2-4%.”

He further explained how deductions from various contracts—including quality assurance, IT services, and provisions—significantly erode ECG’s revenue. Despite selling $100 worth of power, the company is only able to collect 60% of the revenue.

“There are so many contracts deducting monies at the source. So, I have told ECG, and this is also an instruction from the Chief of Staff, to halt all payments for supplies. This is a firm directive, and if anyone within ECG—whether in the finance directorate or elsewhere—is listening, this is the instruction we issued yesterday,” he stated.

Mr. Jinapor’s directive follows President John Mahama’s announcement on January 8, 2025, regarding ongoing discussions about the privatization of power distribution in Ghana. President Mahama expressed concerns over ECG’s operational inefficiencies, financial mismanagement, and poor service delivery, which have contributed to the company’s mounting revenue losses.

As the government moves toward addressing these challenges, the directive to halt payments is seen as a step toward streamlining ECG’s operations and laying the groundwork for a more sustainable energy sector.