Dr Ishmael Ackah, advisor to the Minister for Energy and Green Transition, has said that addressing inefficiencies in electricity generation is critical to resolving Ghana’s ballooning energy sector debt and tariff pressures.
Speaking at a high-level forum themed “Addressing Ghana’s Energy Sector Challenges for Economic Transformation,” Dr Ackah identified the generation segment as the largest contributor to the sector’s financial distress, accounting for around 65% of total electricity tariffs and debt.
“If we are not paying, we owe. If we are able to fix the generation issues, we can address maybe a lot more of the problems we have,” he said.
Dr Ackah pointed to three systemic failings in generation: poor planning, unclear institutional responsibilities, and a lack of competitive procurement processes. He criticised the signing of excess Power Purchase Agreements (PPAs), which exceed demand and reserve margins, burdening consumers and the government with high costs.
“Anything beyond the reserve margin, and we cannot export, becomes a cost. If we don’t pass it on, then it becomes a debt we have to pay,” he noted.
He further raised concern about the country’s PPA structure, particularly dollar-denominated contracts with escalating annual pricing. “You go to Nigeria, dollar prices are not escalated. You come to Ghana, the power purchase agreement is in dollars, and we have to escalate it every year. It becomes unsustainable,” he said.
Procurement practices, he added, often ignore benchmarking against regional power prices, allowing Independent Power Producers (IPPs) to introduce overpriced generation capacity without scrutiny.
In the distribution segment, Dr Ackah revealed that over 40% of electricity consumers are either unmetered or use faulty meters, severely undermining utilities’ ability to recover revenue. “As we speak, out of about 6 million customers of the utilities, more than 40% do not either have meters or their meters are not working. Now, how do we collect money?” he asked.
While recognising steps taken by the Ministry of Energy, including reforms to procurement processes and a World Bank-backed initiative to roll out one million new meters, Dr Ackah warned that lasting solutions would require broader structural fixes.
He urged stronger private sector participation in distribution services, and called on ECG and NEDCo to boost billing and collections efficiency. Ghana currently records a monthly revenue gap of approximately GHS250 million across its power utilities.
Dr Ackah also noted the need to align all generation and procurement decisions with the Energy Commission’s Integrated Power Sector Master Plan (IPSM), warning that deviation from the IPSM’s data and projections would continue to undermine sector stability.
“Until we address procurement of generation transparently and align with the IPSM, it will be very difficult to have a sustainable pathway in the power sector,” he said.
