Ghana’s Energy Sector Debt Swells to $3 Billion, Energy Minister-Designate Discloses
Ghana’s energy sector debt has ballooned to $3 billion, according to John Abdulai Jinapor, Energy Minister-designate, who described the mounting liabilities as a product of ineffective management and spiraling interest payments.
Appearing before Parliament’s Appointments Committee on Monday, January 13, Mr. Jinapor provided a historical analysis of the debt trajectory, noting that official records validated by Parliament in 2017 pegged the sector’s liabilities at $2.1 billion.
This figure has since escalated, reaching $2.5 billion by September 2024 before hitting the current $3 billion mark, as confirmed by reconciliation meetings involving the Ministry of Energy, the Energy Commission, and the Electricity Company of Ghana (ECG).
“When we were leaving office, the consolidated debt stock was close to $2 billion. By August 2017, an audit conducted under the Energy Sector Levies Act (ESLA) confirmed the total energy sector liabilities at GH₵9.4 billion, equivalent to $2.1 billion at an exchange rate of 4.4. As of today, reconciled figures from official sources place the debt at $3 billion,” Mr. Jinapor stated.
Legacy Challenges and ESLA Contributions
Mr. Jinapor pointed to the Energy Sector Levies Act, which has generated approximately GH₵45 billion since its inception, as a critical intervention in servicing both principal and interest obligations.
However, he underscored its limitations in stemming the tide of rising debt.
“While ESLA has helped reduce some of the financial pressures, it is evident that inefficiencies and mismanagement have compounded the sector’s liabilities,” he explained.
Speaking further, the Energy Minister-designate, acknowledged that structural reforms are urgently needed to stabilize the sector, with lessons from past policy missteps informing the current government’s strategy.
Ghana’s energy sector debt remains a critical concern, particularly as the country grapples with broader fiscal constraints. Analysts will be closely watching the new administration’s ability to navigate these challenges while maintaining investor confidence in the energy market.
