ECG inefficiencies could send Ghana back to IMF – Prof Bokpin

Prof Bokpin, an economist and finance professor, has warned that inefficiencies within Ghana's state-owned enterprises, particularly the Electricity Company of Ghana (ECG), could force the country to seek another financial rescue from the International Monetary Fund (IMF). In an interview on JoyNews’ Newsfile, Prof Bokpin emphasized that Ghana cannot afford to return to "business as usual" after years of fiscal strain caused by these inefficiencies.

He estimated that state-owned enterprises, including ECG and the Ghana Cocoa Board (COCOBOD), have cost Ghana between 2.5% and 3.2% of its GDP over the past 15 to 20 years. The energy sector, in particular, places significant pressure on Ghana's fiscal space, requiring additional allocations to cover sector shortfalls. Prof Bokpin stated that rectifying these losses and inefficiencies would necessitate substantial investment, which the government must carefully finance without diverting resources from other vital sectors.

He noted that the IMF-supported program has brought greater transparency to the energy sector, particularly in terms of loss scale and financial flows, and highlighted the progress made with the cash waterfall mechanism, which the IMF program has helped improve. Prof Bokpin urged the government to use the current reform process to address structural problems within state-owned enterprises, rather than relying on continuous financial support.

He called for broader consultation and greater disclosure of reform proposals, warning that returning to previous approaches could exacerbate Ghana's fiscal pressures, potentially leading to another IMF intervention.