Ghana: When the shadow of debt looms over energy advances
Ghana has recently averted a major power crisis with the delivery of 450,000 barrels of light fuel from Nigeria in late May 2025, restoring electricity supply to normal levels even allowing for exports to neighbouring countries.
However, this short-term stability conceals a severe structural challenge: the energy sector’s debt has reached approximately 80 billion cedis ($5.6 billion), a burden described by authorities as “unsustainable.”
The Electricity Company of Ghana (ECG) alone owes over 60 billion cedis ($4.2 billion), largely due to take-or-pay contracts with independent power producers (IPPs).
These agreements require payments for electricity capacity regardless of usage a situation that previously led to the temporary shutdown of the 560 MW Sunon Asogli power plant in October 2024 over unpaid debts.
In response, Ghana’s parliament approved a fuel levy increase of 1 cedi per liter in June 2025, expected to generate around 5.7 billion cedis annually.
Yet the Ministry of Finance estimates that $3.7 billion is still needed to clear existing debts. Without deeper reforms, the cumulative deficit could exceed $9 billion by next year.
Although power generation is currently stable, the energy debt remains a critical threat to Ghana’s macroeconomic health.
The World Bank projects economic growth will slow to 3.9% in 2025, down from 4.2% in 2024, partly due to these financial pressures.
