IMF-backed reforms must tackle Ghana’s long-running energy crisis – Prof. Bokpin warns

Economist and Professor of Finance, Prof. Godfred Bokpin, has called for greater transparency, broader consultation and a clearly defined role for private-sector participation in Ghana’s electricity distribution sector.He warned that the persistent weaknesses within the energy sector continue to pose a significant threat to the country’s fiscal stability. Speaking on JoyNews’ Newsfile on Saturday, Prof.

Bokpin said many of the problems currently confronting the Electricity Company of Ghana (ECG), including high distribution losses, weak revenue collection, outstanding obligations to power producers and the financial burden placed on the state, pre-date Ghana’s current IMF-supported programme. He nevertheless acknowledged that the IMF programme has contributed to greater transparency in the management of the energy sector and has helped improve the operation of mechanisms designed to ensure that available revenues are distributed across the electricity value chain. According to him, the fundamental issues identified under the IMF programme are not new.

“The issues that have been identified as the root causes have been with us for years, for decades, even before this IMF-supported programme,” he said. Bokpin argued that the focus should therefore not simply be on criticising the data being used to assess the sector’s financial position. Instead, the country should use the greater availability of information under the programme to measure whether meaningful progress is being made.

Bokpin said one of the important benefits of the IMF-supported reforms has been improved transparency regarding the scale of Ghana’s energy-sector liabilities and losses. He said the figures being presented on the amount that needs to be paid and the financial projections should not be dismissed or used to discredit the country’s electricity sector. Rather, he said, the data should help policymakers and the public understand the extent of the problem and assess whether reforms are producing results.

He pointed specifically to the cash waterfall mechanism, which is intended to ensure that revenues generated within the electricity supply c… Godfred Bokpin, has called for greater transparency and broader national consultation over proposed reforms in Ghana’s electricity sector, warning that the persistent financial challenges facing the Electricity Company of Ghana (ECG) continue to pose a major risk to the country’s fiscal stability. Speaking on JoyNews’ Newsfile on Saturday, Prof Bokpin said the structural problems confronting Ghana’s energy sector did not originate with the current International Monetary Fund (IMF)-supported programme.

He argued that issues including inefficiencies, losses across the electricity value chain, weak revenue collection and the financial obligations associated with power generation and distribution had existed for decades. According to him, the IMF programme has nevertheless helped bring greater transparency to the sector and has provided a framework within which some of the long-standing problems can be better measured and addressed. He stressed that the continuing challenges should therefore not be interpreted simply as failures of the current IMF programme, but rather as evidence of structural weaknesses that successive governments have struggled to resolve.