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The government of Ghana has approved a set of bold structural reforms targeting state-owned enterprises (SOEs) to stabilize public finances and address the country’s rapidly growing energy sector debt.
In an interview with Bloomberg at The Africa Debate in London, Finance Minister Dr. Cassiel Ato Forson warned that without swift and decisive measures, liabilities in the energy sector could double by 2027. He noted that this fiscal pressure is already affecting international market confidence, highlighting the urgency of the issue.
According to Dr. Forson, the financial strain is driven more by operational inefficiencies than by tariff structures alone. He specifically pointed to weaknesses in the state-run electricity distribution network as a major contributor to the crisis.
“The problem is not just tariffs. Inefficiencies, particularly in distribution, are being passed on to ordinary Ghanaians, making electricity unnecessarily expensive,” Dr. Forson explained.
He further stressed the scale of the challenge, noting that energy sector debt is the largest among Ghana’s liabilities and surpasses domestic capital expenditure, demanding urgent intervention.
To address this, the government plans to implement aggressive corporate governance reforms and encourage private sector participation, especially in loss-making entities such as the Electricity Company of Ghana (ECG). These measures aim to improve operational efficiency and financial accountability.
“Cabinet has approved private sector participation as part of our strategy to revive the sector. Delayed action is no longer an option. We must act quickly to prevent further economic damage and improve the lives of Ghanaians,” the Finance Minister concluded.
Story by Efua Nessa