President John Dramani Mahama has disclosed that the Ghana energy sector crisis has cost the country more than $8 billion over the past nine years, placing a heavy burden on public finances and limiting government spending.
Speaking at a high-level meeting with Organised Labour at the Jubilee House in Accra, the President described the situation as unsustainable.
“Over the past nine years, Ghana has spent well over 8 billion dollars to address financial shortfalls in the energy sector,” he revealed, adding that “in 2025 alone, the government paid approximately 1.57 billion dollars to settle legacy debts.”
Impact on wages and development
President Mahama stressed that the continuous diversion of funds into the energy sector is directly affecting the government’s ability to improve livelihoods.
“These losses directly impact the economy’s ability to improve wages, enhance working conditions and expand social protection.” - President John Dramani Mahama.
The disclosure highlights the growing strain on an economy already balancing debt servicing, public sector wages, and infrastructure needs, with limited fiscal space for new investments.
At the core of the crisis, the President pointed to longstanding inefficiencies across the power value chain, including weak billing systems, distribution losses, tariff under-recovery, and legacy debts owed to independent power producers.
These challenges, he noted, have created a persistent financing gap that successive governments have been forced to cover to maintain the electricity supply.
Analysts say the sector’s commercial weaknesses remain a major obstacle to fiscal consolidation and economic stability.
Reforms target distribution losses.
President Mahama indicated that the government is pursuing reforms aimed at restoring discipline and improving efficiency within the sector.
“Government is strengthening energy sector reforms to restore discipline, eliminate inefficiencies, especially at the last-mile distribution level, and unlock these wasted resources for national development.” - President John Dramani Mahama.
He emphasised that addressing leakages in billing and revenue collection will be critical to reducing losses and improving cost recovery.
The President’s remarks underscore the broader implications of the energy sector crisis, not only for public finances but also for Ghana’s economic growth.
A financially unstable power sector, experts warn, undermines investor confidence and threatens industrial expansion, making reform efforts essential to ensuring sustainable development and long-term economic resilience.
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