Energy Sector is Ghana’s biggest economic risk – Ato Forson

The Minister of Finance, Dr. Cassiel Ato Forson, has called Ghana’s energy sector a major economic threat. He made this statement in a post on X after a session at the World Bank in Washington, D.C.

Dr. Forson noted that the energy sector faces a financial shortfall of about $2 billion. This amount is greater than Ghana’s total domestic capital expenditure. He emphasized that this issue goes beyond just tariffs.

The entire energy value chain needs urgent reform. Inefficiencies in the distribution sector lead to high tariffs for ordinary Ghanaians.

He pointed out that the Electricity Company of Ghana (ECG) could significantly reduce the deficit by addressing its operational inefficiencies. The government is taking steps to involve the private sector, as cabinet has approved this move.

A Legislative Instrument has been submitted to Parliament for competitive power plant procurement. Dr. Forson stated these actions are crucial for transparency and sustainability in the sector.

He believes the Energy Compact is timely and can have a lasting impact. However, he stressed that action must be taken quickly for the benefit of Ghana's economy and people.

His comments follow an agreement with the International Monetary Fund (IMF) on their fourth program review. This agreement could unlock around $370 million to support Ghana’s economic recovery efforts.