Energy Minister John Jinapor has warned that Ghana’s energy sector is on the brink of collapse if urgent measures, including private sector participation, are not implemented to address its financial challenges.
Speaking during the Day 2 of the National Economic Dialogue on Tuesday, March 4, the minister disclosed that outstanding liabilities in the sector have reached GH₵80 billion and continue to rise. He further noted that the sector incurs a monthly shortfall of $70 million, particularly in the power sector, due to revenue collection challenges.
“If you were to put the energy sector back on its feet today, you would have to clear an outstanding liability of GH₵80 billion. But even more worrying is the fact that our total bill is about $170 million per month, while collection remains below $100 million. If nothing is done, the shortfall will keep growing, and the sector will collapse.”
[embedded content]The minister highlighted three key areas that need immediate attention, with discipline and efficiency at the forefront. He criticised the Electricity Company of Ghana (ECG) for exceeding its 2023 capital expenditure cap.
“In 2023, the PURC approved about $200 million as a cap for ECG’s capital expenditure, but by the end of the year, they had incurred $700 million—$500 million more than approved,” he revealed. “That additional expenditure was not factored into the tariff structure, creating financial gaps.”
Jinapor stressed that private sector participation is critical to stabilising the sector.
“It is quite obvious that we need private sector involvement in the management of the energy sector. If we don’t do that, the sector will collapse, and we are headed in that direction,” he warned.
He also called for a transition to a gas-to-power system to cut costs, reduce corruption, and improve efficiency.
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