Ghana is embarking on significant reforms within its energy sector, focusing on the privatization of its electricity distribution network. This initiative aims to address fiscal challenges and improve efficiency. The government plans to divide the network into five regions, each managed by a separate concessionaire.
The primary goal is to reduce substantial electricity subsidies, which amounted to US$2.1 billion as of January 2025. This privatization strategy draws inspiration from Uganda's experience with Umeme, the company that previously managed Uganda's electricity distribution. The reforms are intended to stabilize the economy.
Uganda's experience with Umeme provides valuable insights. Umeme transformed Uganda's loss-making distribution system into a profitable entity. However, the termination of Umeme's contract highlights potential risks, including the loss of institutional knowledge. Ghana seeks to learn from Uganda's experience to implement effective reforms.