Ghana has cleared GH¢9.1 billion in energy sector arrears by mid-2025, according to an analysis by C-NERGY Global Holdings following the Mid-Year Budget Review presented by Finance Minister Cassiel Ato Forson on July 24. The government says the payments were necessary to stabilise the power sector and protect recent macroeconomic gains. Still, despite the scale of the intervention, the energy sector continues to pose one of the most persistent contingent fiscal risks.
The Ministry of Finance confirmed the disbursement as part of broader efforts to address outstanding obligations to independent power producers (IPPs), fuel suppliers, and other actors in the energy value chain. The settlement comes amid growing concerns about the sustainability of price stability, particularly interest rates and inflation, if these arrears are allowed to accumulate again.
The energy payment forms part of a broader set of arrears, including to contractors, SSNIT, the District Assembly Common Fund, and Eurobond holders, that the government has moved to settle without destabilizing its recent macroeconomic recovery.
While these payments have eased immediate pressure on the electricity supply chain, energy sector inefficiencies continue to exert strain on Ghana’s fiscal framework. Key structural problems, such as non-cost-reflective tariffs, commercial losses by the Electricity Company of Ghana (ECG), and payment delays by public sector off-takers remain unresolved.
Energy Sector: A Persistent Fiscal Drag
There is caution that the fiscal risk posed by the sector is far from resolved. Payment delays by ECG to generators, weak enforcement of revenue collection, and limited restructuring of power purchase agreements continue to place the Ministry of Finance in a de facto backstop role.
The budget review points to “massive disbursements” as evidence of fiscal strength, but the recurring nature of these obligations signals that energy remains a structural drain on public finances, despite being off-budget in many cases. Without a binding framework to reform cost recovery, Ghana may face the reaccumulation of energy debt, offsetting gains made through inflation control and cedi stability.
Investor Confidence vs. Structural Reform
The successful payment of GH¢9.1 billion, without dislocating inflation, the exchange rate, or interest rates, is notable, especially under an IMF-supported program that emphasizes fiscal restraint. It has helped reinforce investor confidence in the government’s ability to meet its commitments while maintaining macro discipline.
Still, rating agencies and capital market participants are likely to track whether these settlements reflect sustainable policy improvements, or a temporary fix ahead of rising political spending pressure heading into the 2026 elections.
The energy sector’s reform trajectory will be key to Ghana’s fiscal credibility, particularly in light of plans to re-enter international capital markets.
Unless structural inefficiencies, such as high technical and commercial losses, delayed tariff adjustments, and weak enforcement of contracts, are addressed, Ghana risks slipping back into a cycle of arrears accumulation. The burden would ultimately fall again on the Treasury, widening fiscal gaps and risking debt sustainability metrics.
In the meantime, while the GH¢9.1 billion clearance marks a positive step, it serves as a reminder that energy sector liabilities remain one of the most stubborn and unpredictable risks to Ghana’s economic recovery.
