Economist and Professor of Finance, Prof. 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.“The issues that have been identified as the root causes have been with us for years, for decades, even before this IMF-supported programme,” Prof Bokpin said.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.Prof Bokpin said the energy sector had been identified as one of the major fiscal risks under Ghana’s IMF-supported programme and maintained that the risk remains significant.He said while the government and its partners now have better information about the scale of the sector’s problems, the underlying financial pressures have not disappeared.“The energy-sector risk was a big issue. It was a big issue and it is still a big issue,” he said.The economist cautioned against dismissing or attacking data showing the amount of money required to settle obligations within the sector.He said projections concerning payments and liabilities should instead be used to understand the extent of the problem and assess whether reforms are delivering tangible improvements.“The data they are referring to here, what needs to be paid, the projections, these are not good data to bastardise the sector. No, not at all,” he said.He argued, the more important development under the IMF programme has been the increased transparency surrounding the sector’s financial position, including the scale of losses and the progress being made in addressing them.Prof Bokpin identified the cash waterfall mechanism as one area where he believes the IMF-supported reforms have produced some improvement.The mechanism is intended to ensure that revenues collected within the electricity sector are distributed according to an agreed priority structure, allowing payments to be made to key participants in the electricity supply chain.According to Prof Bokpin, the mechanism is now functioning to some extent, representing an improvement over the situation that existed before the IMF programme.“Today, the cash waterfall mechanism is working to some extent. You can credit that to the IMF programme because we know what was happening with the cash waterfall mechanism before,” he said.He suggested that such improvements in transparency and financial discipline should be recognised even as the country continues to grapple with the sector’s deeper structural challenges.Despite these improvements, Prof Bokpin expressed concern about the amount of public money required to sustain the energy sector.He said the additional budgetary allocations needed to support the sector had become so significant that they could exceed the combined allocations to some of Ghana’s key social and economic sectors.“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 also exceeds the combined budgetary allocation to the Ministry of Health, Food and Agriculture, Education,” he said.His comments underline the difficult choices facing the government as it attempts to maintain reliable electricity supply while simultaneously protecting scarce public resources for health, education, agriculture and other development priorities.Prof Bokpin questioned whether Ghana could continue to address the problem primarily through government funding.He said successive administrations had failed over the decades to implement the necessary reforms without significant political and institutional constraints.“Are we able to implement this on our own? We have not. Over the decades, we have not,” he said.The economist also stressed that reducing losses across Ghana’s electricity value chain would require significant investment.He said the country could not expect substantial improvements in generation, transmission and distribution efficiency without investing in the infrastructure and systems needed to reduce technical and commercial losses.“There’s no way we can reduce the level of losses from generation, transmission to distribution without a certain level of investment,” Prof Bokpin said.The challenge, he noted, is determining how that investment should be financed.If government is expected to provide all the necessary funding, he argued, it could place even greater pressure on the national budget and reduce the resources available to other sectors.The central question, therefore, is how Ghana can close the investment gap while ensuring that the required improvements in efficiency actually materialise.Prof Bokpin noted that government had increased allocations through the Ministry of Finance over the past four to five years, but maintained that additional public spending must be accompanied by measurable improvements in efficiency and performance.A significant part of Prof Bokpin’s argument centred on the proposed involvement of private-sector operators in ECG and the electricity distribution sector.He questioned whether the government had sufficiently explained to Ghanaians exactly what it means by private-sector participation.“There are various forms of private-sector participation. Which form are they going for?” he asked.Prof Bokpin said the current discussion could easily be interpreted by the public as an attempt to hand ECG entirely to private investors.However, he argued that private-sector participation does not necessarily mean transferring the entire electricity value chain to private companies.One possible model, he suggested, could involve ECG remaining as a holding company while private operators take responsibility for distribution in designated geographical zones.Under such an arrangement, private companies could purchase electricity from ECG, distribute it to consumers and collect payments, subsequently paying ECG according to an agreed commercial arrangement.He said this model could allow private-sector operators to contribute capital, expertise and operational efficiency without necessarily taking over the entire electricity system.“ECG probably is going to be a holding company. There’s going to be maybe four or three or so different private-sector companies,” he said.Prof Bokpin stressed, however, that the government needs to disclose its intended structure clearly before the reforms are implemented.The economist also pointed to Ghana’s previous experience with private-sector involvement in electricity distribution and revenue collection.He said there had been evidence of improved revenue collection when private operators became involved in aspects of ECG’s operations.“We know that there was some level of improvement when EDS took over immediately with collection and all of that,” he said.However, he stressed that Ghana does not necessarily have to replicate the previous arrangement exactly.Instead, lessons from that experience should inform a new model that is better designed and adapted to the country’s current circumstances.For Prof Bokpin, the critical issues are transparency, accountability, effective regulation and ensuring that the proposed arrangement delivers measurable improvements in efficiency.Prof Bokpin also argued that the energy-sector reforms should be approached as a national rather than partisan issue.He pointed out that both of Ghana’s two major political parties have played roles in the evolution of private-sector participation in the energy sector.He said the IMF programme was negotiated by the previous NPP administration, which agreed to the reforms, while the current NDC administration inherited the programme and has also accepted the principle that greater private-sector participation is necessary to address the challenges confronting the sector.He therefore called for a broader consultation involving political parties, organised labour, industry stakeholders and the wider Ghanaian public.“The IMF programme was negotiated by the NPP administration and they agreed to these reforms, which the NDC has inherited,” he said.He added that the NDC administration also recognises private-sector participation as an important component of efforts to address losses across generation, transmission and distribution.According to Prof Bokpin, the shared position of the two major political parties creates an opportunity to build a more durable national consensus around the reforms.Prof Bokpin cautioned against presenting the proposed reforms as though private investors would take control of the entire electricity value chain.He said the government could explore a model under which ECG remains publicly owned while private companies operate specific distribution zones.Such an arrangement, he suggested, could allow Ghana to retain strategic oversight of the electricity sector while leveraging private-sector capital and expertise to improve distribution and revenue collection.He said the details of the proposal must, however, be made public.“There has to be greater disclosure of what kind of private-sector participation we are talking about,” he said.Without such disclosure, he warned, public uncertainty and political resistance could undermine the reform process.Prof Bokpin placed the ECG challenge within the broader problem of inefficiencies among Ghana’s state-owned enterprises.He said the government’s proposed policy-coordination reforms were largely focused on improving the performance of state-owned enterprises, which he argued have imposed a significant cost on the economy over many years.“Over the last 15, 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 Cocoa Board and the rest of them,” he said.He warned that continuing with the existing approach could undermine Ghana’s fiscal recovery and eventually force the country to seek another round of external financial assistance.“If we go back to business as usual, it’s just a matter of time and we have to resort to the IMF and the World Bank for another level of intervention,” he cautioned.Prof Bokpin also highlighted the government’s commitment under its policy framework to conclude the private-sector participation process by June 2027.He noted that previous administrations had also set reform targets for the energy sector, but implementation had been slowed by political considerations, including electoral cycles.He suggested that the reforms must now be insulated from short-term political calculations if Ghana is to achieve lasting improvements.According to him, the country’s fiscal position means that postponing difficult decisions is no longer a sustainable option.He argued that Ghana cannot continue to accumulate energy-sector liabilities, inject public funds into inefficient state-owned enterprises and expect the same model to deliver a different outcome.He warned that when ECG and other entities within the electricity value chain operate inefficiently, the cost is ultimately transferred to consumers through tariffs, taxes and the wider economic consequences of fiscal pressures.“We cannot continue as business as usual, the way we have done things, because really, the consumer will continue to pay and pay and pay and will not get far,” he said.