‘Govt committed to restoring Ghana’s energy sector’
Dr Mohammed Amin Adam, the Minister of Finance has indicated that ongoing energy sector reforms are meant to make the sector more viable than it currently is.
Speaking at the 2024 Spring Meetings of the Bretton Woods institutions in the USA, on the theme ‘Energizing Africa: What Will It Take to Accelerate Access & Improve Lives?’ the Minister underscored the importance and impact of the energy sector to the economy and development of Ghana.
Ghanaians have been undergoing heavy and nationwide power outages which have occasioned some punitive action from the regulator , the Public Utility Regulatory Commission. The Commission has sanctioned the power distributor -the Electricity Company of Ghana (ECG) by imposing a GH₵5.8 million fine on the Board of ECG.
Dr Adam stressed that it was unsustainable to continue using the national budget to finance energy sector shortfalls, the reason, Dr Adam noted, government had been pursuing various reforms to make the energy financially sustainable. The Minister outlined some of the reforms government was pursuing.
“The measures we are implementing to strengthen the finances of the sector include IPP renegotiation; we are renegotiating some of the contracts we signed with the Independent Power Producers so that we can reduce the cost of generation , particularly capacity related costs; we also are implementing tariff reforms and I am sure you have heard of the automatic tariff adjustment which we are implementing in other to account for inflation, exchange rate and also changes in the generation mix,” Dr Adam explained.
The Minister of Finance assured investors government was committed to resolving the challenges Ghana’s energy sector was facing.
“Since 2022, the regulator, the Public Utility Regulatory Commission, put in place a multi-year tariff framework, that led to increase in tariff by about 70% since September 2022 but this is to assure investors that we admit there are challenges but we are also bold as a government to take the necessary bullet in other for us to put the sector in a more sustainable manner so as to address those challenges that investors are worried about,” he stated.
