Fiscal risks in the energy sector remain a challenge- Ato Forson

Finance Minister Cassiel Ato Forson has highlighted ongoing fiscal risks in the energy sector.

The government is taking steps to reduce and eliminate this shortfall.

He shared this information at a press conference about the IMF-Supported Programme's 4th review.

Forson stated, “Fiscal risks in the energy sector remain a challenge. We have instituted measures to reduce and eventually eliminate the shortfall.”

He explained that a Cash Waterfall Mechanism is being implemented. This mechanism guarantees minimum payments to Independent Power Producers (IPPs).

The single account mechanism is now operational, ensuring compliance with these guidelines.

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Statement by Dr. Cassiel Ato Forson, MP, Minister for Finance

On the Occasion of the Joint Press Conference on the 4th Review of the IMF-Supported Programme

15th April 2025

Welcome everyone to this joint GoG-IMF press briefing.

The IMF mission began on April 2nd and concluded today.

It has been two weeks of hard work and commitment.

We reached a Staff-Level Agreement (SLA) on the 4th Review today.

This is a significant step towards stabilizing Ghana’s economy.

We are committed to implementing this program despite challenges.

Several structural benchmarks were breached when we took office.

However, we have worked hard to reverse this situation.

In some cases, we fast-tracked certain reforms ahead of schedule.

Pragmatic measures are now in place to address payables from 2024.

These measures aim to strengthen spending controls and enhance budget credibility.

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Measures Include:

1. The Auditor-General will audit payables with two international firms.

2. An amendment to the Procurement Act requires commitment authorization for procurements.

3. The PFM Act was amended to introduce a debt rule targeting a 45% debt-to-GDP ratio by 2035.

4. A Compliance Desk at the Ministry of Finance will monitor adherence to fiscal commitments.

5. A PFM Commitment Control Compliance League Table will rank MDAs based on compliance levels.

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We have also implemented several structural reforms due by December 2024 and March 2025:

1. We migrated accounts for 549 MDAs into GIFMIS.

2. The PURC published an ECG revenue audit report for Q4 2023 and full year 2024.

3. Quarterly tariff adjustments by PURC were executed as required under our program conditions.

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I acknowledge that fiscal risks in the energy sector remain challenging but we are addressing them effectively.

We have operationalized mechanisms ensuring minimum payments to IPPs among others.

I assure all stakeholders that I will lead efforts for successful implementation of our commitments under this program.

Approval from the IMF Board will trigger disbursement of US$370 million, totaling US$2.3 billion under this program.

Reaching an SLA marks significant progress toward building "the Ghana We Want."

On behalf of President John Mahama, I thank Ghanaians for their patience and support during these times.

We appreciate every sacrifice made as we work towards macroeconomic stability and inclusive growth together.

Thank you for your attention!

God bless our homeland Ghana!