The Minister of Finance, Dr. Cassiel Ato Forson, has raised concerns about inefficiencies in Ghana’s power distribution sector that are resulting in high tariffs for ordinary Ghanaians. He emphasized the urgent need for reform across the entire energy value chain.
Dr. Forson shared his insights in a post on his X page following an in-depth session on the Ghana Energy Compact under Mission 300 at the World Bank in Washington, D.C., on Tuesday, April 22. He highlighted that Ghana’s energy sector poses the largest economic risk currently facing the country, burdened by a financial shortfall of approximately $2 billion, which exceeds the country’s domestic capital expenditure.
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“This challenge extends beyond just tariffs. The entire energy value chain requires urgent reform. Inefficiencies, particularly in the distribution sector, are being passed on to the ordinary Ghanaian through high tariffs. The Electricity Company of Ghana (ECG) alone could halve the shortfall if it addresses these inefficiencies,” Dr. Forson stated.
He also mentioned that the cabinet has already approved private sector participation in the energy sector. “We have submitted the Legislative Instrument to Parliament to enable competitive procurement for power plants. These steps are crucial for bringing transparency and sustainability to the sector,” he added.
Dr. Forson believes the Energy Compact has arrived at an ideal time, with the potential for lasting impact. However, he stressed that it is essential to avoid delays, stating, “Time is of the essence. We must act swiftly to turn this situation around for the benefit of our economy and the well-being of our people.”
Dr. Cassiel Ato Forson is leading Ghana’s delegation to the 2025 IMF and World Bank Spring Meetings, marking the first participation under the new National Democratic Congress (NDC) administration led by President John Dramani Mahama.
These meetings follow closely after Ghana secured a staff-level agreement with the International Monetary Fund regarding the fourth review of its IMF-supported program. This agreement is expected to unlock approximately $370 million in support of Ghana’s economic recovery agenda. Notably, this deal was reached despite the previous administration having missed several structural benchmarks and quantitative targets under the program.
The agreement reflects a renewed international confidence in Ghana’s direction, largely attributed to the swift and targeted actions taken by the new government. The Mahama-led administration has worked diligently to address the country’s fiscal challenges, often fast-tracking key structural reforms and implementing additional measures aimed at restoring macroeconomic stability and credibility.
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One of the most urgent matters tackled has been the significant buildup of payables in 2024, which led to a primary deficit far exceeding the modest surplus that had initially been planned. In response, the government has introduced a bold and pragmatic reform package designed to curb arrears, reinforce spending discipline, and strengthen Ghana’s public financial management system.