Ghana's Energy Sector: From Fiscal Vulnerability to a Platform for Sustained Growth

Ghana's energy sector is central to industrialization and inclusive growth, but persistent tariff, distribution, and collection gaps have made it a source of fiscal risk. Sector shortfalls and arrears to power producers and fuel suppliers require government transfers, weaken fiscal buffers, and undermine reliability. Recent reforms, supported by an IMF program, have helped stabilize conditions by resuming periodic tariff adjustments, strongthening Cash Waterfall Mechanism implementation, and reducing arrears. Nevertheless, vulnerabilities remain. Durable progress requires disciplined tariff-setting, payment enforcement, arrears clearance, lower losses, private distribution participation, transparent procurement, and stronger governance to support investment and reliable electricity supply.