Samuel Dubik Mahama, the former Managing Director of the Electricity Company of Ghana (ECG), has identified foreign exchange volatility as the single biggest operational challenge for the power utility. This persistent issue continues to harm the company’s ability to plan, predict its finances, and remain stable. The difficulty arises from a fundamental mismatch in how ECG earns and spends money.
ECG buys essential power supplies from abroad. These purchases must be paid for using foreign currencies like the US dollar. However, the company mostly collects its revenue from Ghanaian customers in the local currency, the Ghana cedi (GHS). This means fluctuations in the exchange rate between the GHS and foreign currencies directly impact ECG's costs and profitability. Even small changes in the GHS value can significantly alter the true cost of operations suddenly.
This problem places ECG's financial health in a precarious position. It makes it very hard to accurately calculate costs and predict income over time. This difficulty is not new; it has been a recurring issue for the power sector. For years, attempts have been made to reform ECG and the broader energy sector to ensure reliability and financial sustainability. The country's overall economic performance and its ability to attract foreign investment are closely linked to the stability of its currency.
Speaking on JoyNews’s Newsfile program on May 16, Mr Mahama explained this core issue. "ECG’s biggest problem is forex," he stated. He elaborated that the constant need to convert GHS to cover foreign currency obligations creates unpredictable financial outcomes. "You go to work in the morning, by evening your whole day is messed up because your accounting didn’t balance,” he said, illustrating the everyday impact.
Mr Mahama noted that recent signs of greater stability in foreign exchange markets are a positive step. "For me, looking at some of these indicators, I’m going to say yes, we are in a good place. The money will add up and there will be enough stability for the company to grow," he commented. This improved stability means ECG can forecast its expenses and revenues more reliably. This allows for better long-term financial planning. Improved financial planning is crucial for ECG to invest in infrastructure and ensure consistent power supply across the nation. This stability is seen as building upon previous reforms for sector improvement.