President John Dramani Mahama has reaffirmed his administration’s commitment to resolving Ghana’s escalating energy sector debt, which now stands at approximately GH¢80 billion.
Speaking at the Africa CEO Summit in Abidjan, Côte d’Ivoire, President Mahama outlined a comprehensive strategy aimed at stabilizing the sector and restoring investor confidence.
“The energy sector has been number one in terms of priority.
“On my second coming, we met a messed-up energy sector with debts of almost 2.5 billion owed to Independent Power Producers, to gas suppliers, and everybody.”
President John Dramani Mahama
The President acknowledged the severity of the sector’s financial challenges, noting that the previous administration left behind significant arrears.
To tackle these obligations, Mahama pledged a strategic approach to renegotiate and ring-fence the debt while ensuring payments are made to all affected entities.
“By the end of the year, early next year, we should be able to make everybody happy in terms of dealing with that debt.”
President John Dramani Mahama
The President acknowledged that part of the financial strain stems from inefficiencies in revenue collection, particularly within the Electricity Company of Ghana (ECG).
“We need to clean the slate. But in cleaning that slate, we must look at the whole value chain.
“A lot of the problem comes from downstream, in distribution, because ECG is not as efficient in collecting revenue. We are experiencing technical and commercial losses of about 40%.”
President John Dramani Mahama
Mahama proposed greater private sector involvement in billing and metering services to boost revenue collection efficiency, reducing financial losses within the electricity distribution network.
“We are going into the phase of private sector participation in billing and metering to bring efficiency in revenue collection so that we can pay for the power we take from the independent power producers.”
President John Dramani Mahama
Reinstating the Cash Waterfall Mechanism
In efforts to ensure equitable revenue allocation, the government has reinstated the Cash Waterfall Mechanism, which ensures that ECG’s revenues are shared proportionately among power producers.
Mahama criticized previous failures to adhere to the system, which led to further debt accumulation.
“We established the Cash Waterfall Mechanism where ECG’s revenues were supposed to be shared proportionately so that everybody got something every month.
“We’ve gone back to the Cash Waterfall Mechanism, and we’re adhering to it properly, so everybody is seeing something every month.”
President John Dramani Mahama
As part of the broader sector reforms, Mahama disclosed that private investors have expressed strong interest in tapping into Ghana’s downstream energy economy.
“People are queuing up. I said they should wait. We’re going to do expressions of interest.
“We just got a report from the committee that’s advising us on how to do it.”
President John Dramani Mahama
Mahama stressed that cabinet will review the options, and once a decision is made, an expression of interest will be launched to attract stakeholders.
The President emphasized the importance of local Ghanaian participation in the upcoming privatization process, ensuring that even international bidders form partnerships with local entities.
“There must be Ghanaian participation. There must be local participation.
“Even if an international company is bidding, it must have a local partner.”
President John Dramani Mahama
Ghana’s energy sector reforms signal a commitment to debt resolution, efficiency improvements, and investment attraction.
With private sector participation, reinstated financial mechanisms, and targeted reforms, the country aims to eliminate financial losses, stabilize the sector, and enhance investor confidence.
As government deliberates on the best approach to billing and metering privatization, the coming months will be crucial in shaping the future of Ghana’s electricity distribution framework.
With steps being taken to clear debts and improve revenue collection, Mahama’s administration is focused on long-term energy sustainability and financial stability.
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