Ghana’s power sector is grappling with significant challenges driven by poor financial management and inefficiencies, according to Nana Amoasi VII, Executive Director of the Institute for Energy Security (IES). Speaking on Joy FM’s Super Morning Show, he shed light on how these issues have led to a reliance on costly liquid fuel, the underutilization of domestic natural gas, and a general lack of accountability in the sector.
Nana Amoasi VII explained that despite Ghana having access to abundant domestic natural gas and additional support from Nigerian imports, the country frequently resorts to liquid fuel for power generation. This choice, he noted, is not rooted in necessity but in financial mismanagement and vested interests.
“Even though we have a domestic natural gas supply supported by Nigerian Gas, we still resort to liquid fuel because that is where the interest lies, and because we have not been sound and efficient in managing the financial space of the sector,” he said.
He further elaborated on how financial constraints disrupt operations, with transmitters occasionally refusing to transport gas due to unresolved debts. These disruptions are sometimes cloaked in operational justifications, such as maintenance activities, but are often aimed at pressuring the government to clear arrears.
“So, because we are not getting much from our own domestic sources, and sometimes we could even have the gas, but the transmitter (WABCO) may refuse to transmit it. We saw a letter three days ago indicating that they want to undertake some pipeline cleaning and other activities. That becomes a restriction on gas flow,” he explained.
Nana Amoasi VII also called out the deliberate tactics employed to restrict gas flow, which he described as manipulative attempts to force the government’s hand. “They occasionally restrict the flow of gas by closing valves or resorting to false maintenance with the intention of forcing the government to pay,” he added.
The preference for liquid fuel over natural gas has far-reaching consequences for the sector. Liquid fuel is significantly more expensive, and this added cost often translates into higher electricity tariffs for consumers. The frequent flaring and rejection of domestic natural gas further compound these inefficiencies, representing missed opportunities to utilize a cleaner and cheaper energy source.
The issue is further exacerbated by vested interests that benefit from maintaining the status quo. “I am sure the government sometimes doesn’t care because they believe they can resort to liquid fuel supply, which creates an opportunity for someone to make money,” Nana Amoasi VII remarked.
The failure to address these systemic issues undermines the financial health of Ghana’s energy industry and erodes public trust in its management. The sector’s heavy reliance on liquid fuel, despite the availability of domestic natural gas, highlights the misalignment between resource management and national interests.
Nana Amoasi VII emphasized the need for a shift toward sound financial management and transparency. Resolving these challenges, he suggested, requires prioritizing the use of natural gas, eliminating vested interests, and establishing accountability at all levels of the sector. “It is still the same mismanagement we are talking about,” he said, stressing the urgency of reform.
Without meaningful changes to how resources are managed and decisions are made, Ghana’s power sector will continue to face inefficiencies, rising costs, and dissatisfaction from its citizens.
