The International Monetary Fund (IMF)
The International Monetary Fund (IMF) has projected Ghana’s energy sector shortfall to rise to $2.2 billion by December 2025.
According to the Fund, this reflects the Electricity Company of Ghana’s (ECG) significant losses, driven by sluggish tariff adjustments and rising power generation costs.
This worsening deficit casts a shadow over the government’s fiscal consolidation efforts under the Extended Credit Facility (ECF) arrangement and raises concerns about the long-term sustainability of energy sector financing.
In the 2025 Budget, the government earmarked GH¢27.1 billion (approximately $1.7 billion) to cover the projected shortfall.
However, this allocation is based on the assumption that key policy actions will be implemented to curb the financial hemorrhage.
These include the resumption of quarterly electricity tariff adjustments, the rollout of the Energy Sector Recovery Programme (ESRP), and the completion of a multi-year tariff assessment (MYTO) by the end of September 2025, a structural benchmark under the IMF programme.
The Fund noted that some progress has recently been made in addressing the sector’s challenges.
The publication of the 2023 Quarter 4 and 2024 ECG Revenue/Collection Accounts Validation Reports (originally due end-January 2025) was completed with delays, as the review period extended beyond what was initially planned.
The IMF’s 2024 report also highlighted that the Cash Waterfall Mechanism (CWM), a framework designed to ensure equitable distribution of ECG’s revenues to sector stakeholders, was not implemented in accordance with its guidelines.
There were significant discrepancies between ECG’s validated and declared collections (GH¢5.3 billion), and between CWM allocations and actual payments (GH¢3.9 billion).
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