President John Dramani Mahama, delivering his State of the Nation Address to Parliament on Thursday, February 27, 2025, outlined a comprehensive strategy to reform Ghana’s struggling energy sector.

He pledged to stabilize electricity supply, reduce financial distress, and ensure affordable tariffs for all consumers.

“I have directed the Minister for Energy and Green Transitions to implement far-reaching reforms, including enforcing a single revenue collection account, strictly adhering to the Cash Waterfall Mechanism (CWM), and eliminating wasteful expenditures.”
President John Dramani Mahama

A key component of the President’s energy reform strategy is improving revenue collection and curbing inefficiencies in the power sector.

“The Minister, following my directive, has set up an advisory committee to guide the participation of the private sector in metering and billing to improve efficiency in revenue collection and reduce the high commercial and technical losses that are threatening to drown the state-owned utility company.”
President John Dramani Mahama

He cited a pilot partnership between the Electricity Company of Ghana (ECG) and Enclave Power Limited as a model for effective revenue collection.

“ECG provides bulk supply of power to Enclave Power Limited. Enclave Power provides meters and bills all companies operating in the Free Zones Enclave with 99% revenue collection and nearly 100% uptime in power supply.
“This model has proved highly successful and provides us with a workable framework.”
President John Dramani Mahama

By reducing commercial and technical losses, the government aims to lower electricity tariffs and bring relief to consumers. “Reduction in commercial and technical losses will lead to affordable tariffs for everyone and bring relief to all users of electric power,” Mahama emphasized.

President Mahama also stressed the need to transition Ghana’s power sector to full gas utilization, eliminating reliance on expensive crude oil for electricity generation.

“We also aim in the medium term to achieve 100% gas utilization for power production and eliminate the use of crude oil.
“This will save Ghana hundreds of millions of dollars spent on the importation of fuel oils for power production.”
President John Dramani Mahama

The shift to natural gas is expected to enhance energy security and ensure a more stable supply of electricity, reducing Ghana’s vulnerability to global oil price fluctuations.

Tackling Energy Sector Debt and Financial Distress

The President addressed the pressing issue of financial distress within the energy sector, attributing it to mismanagement and unsustainable debts accumulated under the previous administration.

“Mr. Speaker, my administration inherited an energy sector on the brink of collapse, weighed down by unsustainable debts.
“This unfortunate situation has led to many Independent Power Producers (IPPs) and fuel suppliers threatening to cease their operations.”
President John Dramani Mahama

Despite the collection of over GHS 45 billion in Energy Sector Levies (ESLA) over the past eight years, Mahama lamented that the energy sector remains in crisis. “The outgone NPP administration has left the Ghanaian people an energy sector burdened with a staggering GHS 70 billion debt as of December 2024,” he stated.

The President warned that unless urgent interventions are made, several state-owned enterprises (SOEs) in the energy sector could collapse.

“It is of deep concern that several state-owned enterprises (SOEs) in the energy sector are struggling to stay afloat. Unless urgent interventions are made, many of them will go under.”
President John Dramani Mahama

President Mahama further revealed that the deferral of critical maintenance activities, such as the pigging of the West African Gas Pipeline (WAPCO), had exacerbated the country’s power crisis.

The delay in maintenance led to a shortfall in gas supply, necessitating urgent government intervention.

“As a result, my administration has had to swiftly mobilize resources to secure emergency fuel supplies, ensuring that electricity generation continues despite the difficult circumstances.”
President John Dramani Mahama

However, he assured Ghanaians that relief was on the way, stating, “I have been informed that the pigging exercise will be completed in the first weeks of March.

“Once additional gas flows from Nigeria, we anticipate a marked improvement in the power situation.”
President John Dramani Mahama

President Mahama’s address reinforced his administration’s commitment to tackling Ghana’s energy sector challenges head-on.

His outlined reforms, from revenue collection improvements to a full transition to gas-powered electricity generation, aim to restore stability and financial sustainability in the sector.