Minister of Energy and Green Transition John Abdulai Jinapor has raised serious concerns over the escalating financial challenges facing Ghana’s power sector. The minister revealed that the country is billed approximately $175 million every month for power-related expenses, yet only collects less than $100 million, leaving a staggering shortfall of about $70 million monthly and $840million a year.
“The major problem is that we have a total bill of about $175 million every month, especially with the power sector. The collection is less than $100 million. Even going forward, if nothing is done, you’re going to be incurring about $70 million every month as a shortfall or liability, and that for me is a major issue,” the minister stated. He further noted that the outstanding liabilities in the sector have reached around GHC 80 billion and continue to increase.
To address these pressing Energy issues, Jinapor outlined three key strategic measures;
Enhancing Efficiency and Discipline: The minister stressed the need for a higher level of operational discipline and efficiency within the energy sector to curb financial leakages and optimize performance.
Private Sector Participation: He advocated for increased private-sector involvement in the management of the distribution segment, particularly with the Electricity Company of Ghana (ECG), to boost revenue collection and improve service delivery.
Transition to a Gas-Powered Future: Emphasizing cost-saving opportunities, the minister called for an urgent shift towards gas power. He pointed out that with liquid fuel bills totaling around 1 billion this year, reallocating just half of that expenditure could finance the construction of a gas processing plant—potentially saving the nation about 600 million per annum.
Jinapor at the dialogue added that the government will seek private-sector participation in energy distribution and revenue collection. He mentioned that a decision will be reached within six months on whether to pursue full privatization or adopt a concession model, where the successful bidder runs operations for a specific number of years before handing them back to the state.
