Ghana’s Energy Sector Reforms Urgently Needed as $2 Billion Deficit Hits Consumers

News Ghana, Latest Updates and Breaking News of Ghana, News Ghana, https://newsghana.com.gh/ghanas-energy-sector-reforms-urgently-needed-as-2-billion-deficit-hits-consumers/Finance Minister Dr.

Cassiel Ato Forson has raised alarm over Ghana’s energy sector inefficiencies that are driving up electricity costs for consumers, calling it the country’s most pressing economic challenge.The sector’s $2 billion financial deficit now exceeds Ghana’s domestic capital expenditure, creating urgent need for reform.Speaking after a World Bank session on Ghana’s Energy Compact in Washington, Dr.



Forson emphasized that distribution problems at the Electricity Company of Ghana (ECG) account for half the sector’s losses. “These operational inefficiencies are being passed directly to consumers through high tariffs,” he stated in a social media post, noting that comprehensive reforms across the entire energy value chain are required.The government has taken initial steps to address the crisis, including cabinet approval for private sector participation and submission of legislation to enable competitive power plant procurement.

These measures aim to introduce transparency and sustainability to the sector, with Dr. Forson stressing the need for swift implementation given the economic stakes.The energy sector concerns emerged alongside Ghana’s recent achievement of a staff-level agreement with the IMF, securing $370 million in funding despite previous unmet program targets.

This development suggests international confidence in the new administration’s economic management, particularly its rapid response to inherited fiscal challenges including a significant 2024 primary deficit.Ghana’s energy sector troubles reflect a common challenge across developing economies, where power sector deficits often become unsustainable burdens. The current reforms mirror approaches taken by other nations that successfully stabilized their energy sectors through improved efficiency and private sector involvement.

As the government moves forward with its plans, the effectiveness of these measures will be closely watched by both international partners and Ghanaian consumers bearing the cost of current inefficiencies. News Ghana, Latest Updates and Breaking News of Ghana, News Ghana, https://newsghana.com.

gh/ghanas-energy-sector-reforms-urgently-needed-as-2-billion-deficit-hits-consumers/.