Minister for Finance, Dr. Cassiel Ato Forson, has declared Ghana’s energy sector as the nation’s currently biggest economic risk.
According to him, the sector is burdened with a financial shortfall of approximately $2 billion, an amount that surpasses the nation’s domestic capital expenditure.
He made this revelation during a deep-dive session on the Ghana Energy Compact under Mission 300 at the WorldBank.
Dr. Forson emphasized the urgent need for comprehensive reforms in the energy sector. He warned that the size of the deficit exceeds the country’s total domestic capital expenditure and cannot be addressed by tariff adjustments alone.
“The problem is not just tariffs. The inefficiencies, especially in the distribution sector, are being passed on to the ordinary Ghanaian, making electricity costs unnecessarily high,” he stated.
Dr. Forson pointed out that the Electricity Company of Ghana (ECG) could significantly reduce the shortfall if operational inefficiencies were tackled. According to him, resolving these issues could cut the deficit by half.
As part of efforts to revamp the energy sector, the Minister revealed that Cabinet has approved private sector participation in energy operations. In addition, a Legislative Instrument has been laid before Parliament to allow for competitive procurement in power generation services.
Describing the Ghana Energy Compact as a timely and strategic intervention, Dr. Forson urged for its swift implementation.
“The compact has come at the right time. It will in the long run assist Ghana, and we are praying the process is not delayed,” he said.
He called for urgency, stressing that further delays could worsened the nation’s economic challenges.
“Time is of the essence. We must act quickly if we are to prevent further damage to our economy and improve the lives of Ghanaians,” Dr. Forson added.
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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. 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.
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… pic.twitter.com/czW9Ypds8Y
— Cassiel Ato Forson(PhD) (@Cassielforson) April 23, 2025
