The Minister of Finance, Dr. Cassiel Ato Forson, has described Ghana’s energy sector as the most significant economic threat currently facing the country.
In a post on X after a deep-dive session on the Ghana Energy Compact under Mission 300 at the World Bank in Washington, D.C., on Tuesday, April 22, Dr. Forson stated that the sector is weighed down by a financial shortfall of approximately $2 billion—an amount he noted exceeds Ghana’s entire domestic capital expenditure.
“During a deep-dive session on the Ghana Energy Compact under Mission 300 at the WorldBank Yesterday, I reiterated that Ghana’s energy sector is currently the biggest economic risk we face. The sector is burdened with a financial shortfall of approximately $2 billion.
“This amount surpasses our domestic capital expenditure. This challenge goes beyond tariffs. The entire energy value chain requires urgent reform. Inefficiencies, especially in the distribution sector, are being passed onto the ordinary Ghanaian through high tariffs,” part of his post stated.
He highlighted that the Electricity Company of Ghana (ECG) alone could significantly reduce the deficit if it addressed operational inefficiencies.
Dr. Forson added that the government is already taking steps to introduce private sector participation, with cabinet having approved the move. A Legislative Instrument has also been submitted to Parliament to allow for competitive procurement of power plants.
“ECG alone could cut the shortfall by half if it addresses these inefficiencies. Cabinet has already approved private sector participation, and we have submitted the Legislative Instrument to Parliament to enable competitive procurement for power plants. These are critical steps toward bringing transparency and sustainability to the sector. The Energy Compact has come at the right time.
“It has the potential to make a lasting impact, and we are hopeful that the process will not be delayed. Time is of the essence. We must act swiftly to turn this around for the good of our economy and the well-being of our people,” the X post stated.
His remarks come just a week after Ghana reached a staff-level agreement with the International Monetary Fund (IMF) on the fourth review of its IMF-supported programme.
The agreement is expected to unlock approximately $370 million in financial support to bolster the country’s economic recovery efforts.
