Samuel Dubik Mahama, the Managing Director of the Electricity Company of Ghana (ECG), has officially resigned from his position, effective in two weeks.
In his resignation letter addressed to the ECG Board Chairman, Mahama cited personal reasons for his decision, though no further details were provided. He has held this position since May 2022, after being appointed by President Akufo-Addo. His departure comes amid ongoing financial challenges at ECG, including issues with power theft and payment shortfalls to Independent Power Producers (IPPs), although ECG has contested claims of mismanagement.
His resignation has left many in the energy sector surprised, given the relatively short tenure of his leadership. Mahama’s letter highlights that the decision was made after significant reflection.
The Electricity Company of Ghana (ECG) has faced significant financial challenges in recent years, impacting its revenue. These issues include power theft, non-payment of electricity bills by some consumers, and shortfalls in payments to Independent Power Producers (IPPs).
One of the key revenue concerns is ECG’s ability to recover debts owed by various entities. As of 2023, the company reportedly struggled with collecting debts from government institutions and the private sector, affecting its liquidity. In 2022, ECG initiated a revenue mobilization campaign aimed at recovering over GHS 5 billion in unpaid bills, with some success, but challenges remain .
Additionally, ECG has been battling technical and commercial losses. Power theft has been a persistent issue, contributing to these losses and further straining revenue. Technical losses, including inefficiencies in the distribution network, also impact the company’s earnings.
ECG is required to comply with the Cash Waterfall Mechanism (CWM), a framework designed to distribute funds among power sector players, including IPPs. However, due to cash flow issues, the company has struggled with timely payments under the CWM, leading to tensions with power producers, especially regarding payments for May to August 2024 .
Despite these difficulties, ECG has made efforts to recover and manage revenue, such as improving its billing systems and embarking on technological upgrades. However, forex losses, coupled with the costs of liquid fuel procurement, continue to weigh heavily on ECG’s overall financial performance .