The Minister for Finance, Dr. Cassiel Ato Forson, has identified the energy sector as Ghana’s most significant economic risk, citing an alarming annual financial shortfall of approximately $2 billion.
Speaking during a detailed session on the Ghana Energy Compact under the Mission 300 initiative at the World Bank, Dr. Forson emphasized the urgent need for comprehensive reforms in the 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.