The persistent power sector crisis cannot be solely attributed to the Electricity Company of Ghana (ECG), despite the utility provider’s widely acknowledged financial and operational deficiencies.
This is the central argument of a new report by Seth Owusu-Mante for the International Perspective for Policy and Governance (IPPG), which calls for a comprehensive reform of the entire energy value chain.
The July 2025 report, dubbed Securing Ghana’s Energy Future: Policy Actions for Sustainability and Efficiency, draws on the findings of a February expert roundtable held in Accra and involving over a dozen senior professionals from government, academia, industry and civil society. It offers a dispassionate analysis of sector-wide inefficiencies and identifies structural flaws beyond ECG as key drivers of the crisis.
While ECG remains the most visible point of weakness – struggling with revenue collection failures, electricity theft and debt accumulation – the report contends that these challenges are symptomatic of deeper institutional and policy failures.
As of December 2024, energy sector debt stood at approximately US$3billion, a figure that continues to grow under the weight of foreign exchange mismatches, delayed tariffs and legacy payment arrears.
ECG collects nearly all of its revenue in cedis, yet it is contractually obligated to settle significant portions of its power purchase agreements in U.S. dollars. This currency mismatch, combined with sharp episodes of cedi depreciation, has rendered the utility increasingly unbankable. Despite this, experts caution against isolating ECG as the sector’s cause of dysfunction.
“The sector is not suffering from a shortage of policies but from an excess of overlapping rules, weak enforcement and institutional fragmentation,” a portion of the report read.
Modest gains
Nonetheless, ECG has recorded some operational improvements, particularly in meeting its payment obligations under the approved Cash Waterfall Mechanism (CWM).
In May 2025 alone, ECG disbursed a total of GH¢1.07billion to stakeholders across the sector, including GH¢554.9million to Independent Power Producers (IPPs) and fuel suppliers and GH¢518.3million to state utilities, regulators and transmission companies.
The Public Utilities Regulatory Commission (PURC), in its latest validation report, confirmed full compliance with the approved allocations – describing ECG’s performance as consistent with transparency and fiscal discipline. Major beneficiaries included Cenpower (GH¢105million), Bui Power (GH¢88.4million) and ECG itself, which retained GH¢235.5million for operational recovery.
Other streams
National energy institutions, the IPPG report noted, operate within an ecosystem of duplicated mandates and bureaucratic inertia that discourages accountability and inflates operating costs.
The IPPG also drew attention to underperformance in the midstream and upstream segments. Daily crude oil production fell from around 215,000 barrels in 2019 to just under 190,000 barrels by end-2024, well below the 500,000-barrel target industry experts believe Ghana could be achieving.
In the gas subsector, frequent disruptions and processing delays, particularly at the Atuabo Gas Plant, have weakened baseload power supply and increased reliance on expensive heavy-fuel oil imports. Experts warn that without urgent investment in the long-delayed Second Gas Processing Plant (GPP II), domestic gas utilisation will remain below potential.
Meanwhile, regulatory confusion and political interference continue to undermine investor confidence. The report introduces the concept of “political settlement” to explain the sector’s chronic inertia: a reference to informal elite arrangements that prioritise benefit-sharing over competitive efficiency and institutional reform.
“These informal arrangements reward loyalty over competence and have created a system where technically sound policies are routinely sidelined,” the report said.
Even when policies such as the Energy Sector Recovery Programme (ESRP) and Energy Sector Levies Act (ESLA) have been enacted, implementation has lagged due to a lack of political will and fragmented execution.