Policy coordination reforms must target ECG and other SOEs – Prof Bokpin

Economist and Professor of Finance, Professor Godfred Bokpin, has called for stronger reforms targeting the Electricity Company of Ghana (ECG) and other state-owned enterprises, warning that their inefficiencies continue to put pressure on Ghana’s finances. Speaking on JoyNews’ Newsfile on Saturday, August 8, Prof Bokpin said Ghana has, over the past 15 to 20 years, lost between 2.5% and 3.2% of its GDP to inefficiencies in state-owned enterprises, including ECG and COCOBOD. “Over the last 15 to 20 years, between 2.5% to almost 3.2% of our GDP is lost to the inefficiencies of state-owned enterprises alone, including ECG and then COCOBOD and the rest of them,” he said.

He said ECG’s financial challenges have placed a significant burden on the national budget, with government’s additional allocations to cover energy-sector shortfalls sometimes exceeding the combined budgets of the Ministries of Health, Food and Agriculture, and Education. Prof Bokpin also stressed that reducing losses across the electricity value chain requires investment in generation, transmission and distribution. “There is no way we can reduce the level of losses from generation, transmission to distribution without a certain level of investment,” he said.

On proposed private-sector participation in ECG, he called for greater transparency and public consultation. “What is the form of this private-sector participation that they intend to do? Have they communicated this to the people of Ghana to understand?” he asked.

He suggested that ECG could potentially operate as a holding company while private companies handle distribution in designated areas. Prof Bokpin warned that Ghana could face another IMF intervention if it returns to what he described as “business as usual.” “So if we go back to business as usual, it is just a matter of time and we have to resort to the IMF and the World Bank for another level of intervention,” he cautioned. Economist and Professor of Finance has warned that persistent inefficiencies in the Electricity Company of Ghana (ECG) and other state-owned enterprises could push Ghana back to the International Monetary Fund (IMF) for another financial intervention.

Speaking on JoyNews’ Newsfile on Saturday, Prof Bokpin said Ghana cannot afford to return to what he described as “business as usual” after years of fiscal pressure caused by inefficiencies within state-owned enterprises. “So if we go back to business as usual, it is just a matter of time and we have to resort to the IMF and the World Bank for another level of intervention,” he cautioned. He said Ghana has lost between 2.5% and 3.2% of its Gross Domestic Product (GDP) over the past 15 to 20 years due to inefficiencies in state-owned enterprises, including ECG and the Ghana Cocoa Board (COCOBOD).

Prof Bokpin said the energy sector continues to place significant pressure on Ghana’s fiscal space because government has to make additional allocations to cover sector shortfalls. He noted that these extra-budgetary allocations can sometimes exceed the combined budgetary allocations of the Ministries of Health, Food and Agriculture, and Education. “If you look at the fiscal space that the energy sector alone takes, the extra-budgetary allocation that we have to make to cover the energy sector shortfall sometimes exceeds the combined budgetary allocation to the ministries of Health, Food and Agriculture, and Education,” he said.