The international monetary fund (imf) has commended improvements in ghana's energy sector fiscal performance:he International Monetary Fund (IMF) has commended improvements in Ghana's energy sector fiscal performance, attributing them to stronger revenue collection efforts by the Electricity Company of Ghana (ECG). The IMF Resident Representative in Ghana, Dr Adrian Alter, said ECG's measures to optimise energy use and reduce the cost of electricity generation have helped ease the financial burden on the sector.
According to Ghana Web, Dr Alter, in an interview on Channel One TV, highlighted that a significant portion of government expenditure in the energy sector is denominated in US dollars, underscoring the importance of efficient revenue mobilisation for sustaining operations. He noted that increased reliance on domestically produced natural gas had helped reduce dependence on more expensive imported liquid fuels.
Dr Alter stated, "The government has been more careful about the energy mix and trying to reduce the costs of producing electricity. Using domestically produced gas is much better than importing liquid fuel from abroad." He emphasized that the stronger cedi was only one of several factors contributing to the sector's improved fiscal performance, noting a slight improvement in revenue collection at ECG and better implementation of the cash waterfall mechanism.
He further revealed that payments to fuel suppliers and independent power producers (IPPs) were made in US dollars, with the appreciation of the cedi reducing the local-currency cost of these obligations. "The government in the 2025 budget had in mind a certain exchange rate, and most of the expenses on the energy side are in dollars. Imports of fuel, so fuel suppliers are paid in dollars, all the IPPs are paid in dollars," he explained. "When you translate that into cedis, if the currency appreciates, then there is an improvement."
Dr Alter highlighted that these combined measures are enhancing the profitability of the energy sector and mitigating the financial risks it poses to the government. He stressed the importance of sustaining these gains to ensure that the energy sector no longer exerts significant pressure on the country's public finances. "All these measures are essential to the sector's profitability and eventually reducing the fiscal risks to the government," he concluded.
He also noted that the government has become more deliberate in managing the country's energy mix to lower the cost of electricity generation.