- Deloitte Warns Energy Sector Remains Ghana’s Biggest Fiscal Threat
Ghana’s improving macroeconomic outlook remains vulnerable to unresolved financial and operational weaknesses in the energy sector, which Deloitte has identified as the country’s most significant remaining fiscal risk.
In its assessment of the 2026 Mid-Year Budget Review, the professional services firm acknowledged progress in restoring economic stability but warned that mounting liabilities within the Electricity Company of Ghana and other state-owned energy enterprises could eventually transfer to the government’s balance sheet.
Such an outcome could weaken public finances and reverse part of the progress achieved through fiscal consolidation and sovereign debt restructuring.
“Without meaningful reforms, losses within the sector could eventually migrate onto the government’s balance sheet and undermine hard-won gains in debt sustainability,” Deloitte cautioned.
The warning highlights the continuing tension between Ghana’s improving headline indicators and the financial vulnerabilities embedded within the power sector.
The government has recorded stronger economic growth, declining inflation and better fiscal discipline following the debt crisis. However, the energy sector continues to generate liabilities through operational inefficiencies, revenue shortfalls and the inability of some state-owned enterprises to meet their financial obligations.
Where those companies cannot settle payments due to power producers, fuel suppliers or lenders, the central government may ultimately be required to intervene.
This creates contingent liabilities: obligations that may not initially appear as direct public debt but can become fiscal costs when state-owned institutions fail to meet their commitments.
Deloitte welcomed the Finance Ministry’s decision to prioritise structural reforms in the sector but said implementation must be accelerated and sustained.
The firm called for measures to improve operational efficiency, strengthen financial management and restore the commercial viability of energy-sector institutions.
For ECG, the policy challenge includes improving revenue collection, reducing commercial and technical losses and ensuring that electricity supplied to customers is properly metered and paid for.
Weak collection can create financial problems across the entire electricity value chain. When distributors fail to recover sufficient revenue, they may be unable to pay generators and fuel suppliers, resulting in arrears that eventually require government support.
The sector’s financial position also affects Ghana’s broader investment climate.
Reliable and competitively priced electricity is critical to manufacturing, mining, services and household welfare. Persistent inefficiencies can raise production costs, weaken business competitiveness and discourage private investment.
Deloitte’s assessment suggests that energy reform is therefore not only a fiscal issue but also a condition for sustaining economic growth.
The firm noted that Ghana’s sovereign debt restructuring programme was approaching completion, marking an important milestone in the country’s recovery.
However, completing the restructuring will not eliminate the risk of new debt accumulation if unresolved losses in state-owned enterprises continue to create demands on the public purse.
Deloitte welcomed Finance Minister Dr Cassiel Ato Forson’s commitment to strengthening public financial management, enforcing tighter expenditure controls and advancing reforms in the energy sector.
It argued that continued discipline would be required to prevent commitments from being undertaken without sufficient budgetary provision.
The firm also advised the government to manage domestic borrowing carefully.
While domestic debt remains an important source of financing, excessive dependence on short-term instruments could increase refinancing risk and raise future interest costs.
Short-term borrowing requires the government to return frequently to the market to repay or roll over maturing obligations. This can expose public finances to sudden increases in interest rates or reduced investor demand.
Prudent debt management will therefore be necessary to preserve the gains achieved under the fiscal consolidation programme.
Deloitte highlighted a significant reduction in Ghana’s debt-servicing burden, with debt service as a share of domestic revenue declining from 55.70% in 2022 to 28.60% by the middle of 2026.
The improvement means a smaller proportion of government revenue is being used for debt repayments, potentially creating additional fiscal space for healthcare, education, infrastructure and social protection.
However, that space could be eroded if the government is required to absorb large energy-sector liabilities.
The central question is whether Ghana can convert its macroeconomic recovery into a more durable fiscal position by resolving structural risks before they produce another cycle of debt accumulation.
Deloitte’s assessment is broadly positive about the country’s recent progress, but its warning is clear: declining inflation, stronger growth and lower debt-service costs will not be sufficient if the energy sector continues to generate losses that eventually become public obligations.
Sustaining the recovery will require decisive energy-sector reforms, continued expenditure discipline and a debt strategy that avoids replacing restructured liabilities with new fiscal pressures.
