ECG boss attributes 80% of the GHS1.9bn losses to Cedi depreciation

Mr. Samuel Dubik Mahama is the MD of the ECG

The Managing Director of the Electricity Company of Ghana (ECG), Mr. Samuel Dubik Mahama, has attributed about 80 percent of its financial losses to the Cedi depreciation.

The Auditor General’s report has revealed that the state power distributors generated a profit of 822 million Cedis in 2020.

It however indicated that the ECG recorded a loss of GHS1.9 billion in 2021.

Appearing before the Public Accounts Committee (PAC) on Tuesday, February 13, Mr Mahama explained that “The ECG mostly buys the electricity it sells in dollars, then sells in Cedis then now has to go back and pay in Dollars.

“The forex losses alone for the year is something that we have to look at in terms of our business.  Forex losses are what culminate in over 80 percent of the losses that you are seeing. ECG sells electricity so we will do our best to sell enough to reduce our commercial losses to the best of our ability to see how we can close that gap.”

But Energy Analyst and CEO of Euroka Energy Solutions, Dr Yussif Sulemana disagreed with the ECG boss that 80 percent of the losses were due to the forex issues.

Speaking on News 360 on TV3 Tuesday February 13, he said “Indeed, the GHS1.9billion, that is quite huge and I am not surprised about it. What I am surprised by is to attribute about 80 percent of that to the Cedi depreciation or exchange losses.

“That is highly contestable, If you look at ECG as we have it there is a lot to be done, I know they are taking pragmatic steps and I commend them for that, especially the current MD but I think the GHS1.9 billion, 80 percent of it cannot come from exchange losses

“While they are doing their best there is still a lot of room for improvement. There are a lot of areas that they can do better. First of all, the cashless practice that they are championing is an excellent way that will go a long to minimise commercial losses. We also have technical losses that are so huge that is why I say 80 percent of the losses cannot come from the exchange rate depreciation.

“If ECG were to put their acts together to minimize the commercial losses and the technical losses it would help. Why at this time we still have postpaid meters? Some customers need their metters to be replaced by their prepaid meters, foolproof smart prepaid meters that are robust and cannot be interfered with.”