Dr. Cassiel Ato Forson, the Minister of Finance, has characterized Ghana’s energy sector as the foremost economic challenge currently confronting the nation.
In a post on X following an in-depth session regarding the Ghana Energy Compact under Mission 300 at the World Bank in Washington, D.C., on Tuesday, April 22, Dr. Forson highlighted that the sector is burdened by a financial deficit of around $2 billion—an amount that surpasses the total domestic capital expenditure of Ghana.
In a comprehensive session regarding the Ghana Energy Compact under Mission 300 at the World Bank yesterday, I emphasized that the energy sector in Ghana represents the most significant economic risk we currently encounter.
This sector is facing a financial deficit of around $2 billion. This figure exceeds our domestic capital expenditures. The issue extends beyond mere tariff concerns; the entire energy value chain necessitates immediate reform. Inefficiencies, particularly within the distribution sector, are being transferred to the average Ghanaian through elevated tariffs, as noted in part of his statement.
He emphasized that the Electricity Company of Ghana (ECG) has the potential to significantly mitigate the deficit by rectifying its operational inefficiencies. Dr. Forson further noted that the government is actively pursuing the involvement of the private sector, with cabinet approval already granted for this initiative.
Additionally, a Legislative Instrument has been presented to Parliament to facilitate competitive procurement of power plants. “If ECG addresses these inefficiencies, it could reduce the shortfall by fifty percent.
The cabinet has approved the inclusion of the private sector, and we have submitted the Legislative Instrument to Parliament to support competitive procurement for power plants. These measures are essential for enhancing transparency and sustainability within the sector. The Energy Compact has arrived at a crucial moment.”
