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President John Dramani Mahama has revealed that the Akufo-Addo-led administration left a staggering debt of 70 billion cedis in the energy sector despite collecting substantial revenues from the Energy Sector Recovery Levy (ESLA).
Speaking during the 2025 State of the Nation Address, Mahama highlighted the dire state of the energy sector inherited by his administration and the urgent need for reforms to stabilise the sector and safeguard Ghana’s economy.
Energy sector on the brink of collapse
President Mahama painted a grim picture of the energy sector, describing it as being on the verge of collapse due to unsustainable debt.
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He emphasised that the financial burden has led to independent power producers and fuel suppliers threatening to halt operations, which could exacerbate the already precarious situation.
Mr. Speaker, my administration inherited an energy sector on the brink of collapse. It was weighed down by unsustainable debt.
This unfortunate situation has led to many independent power producers and fuel suppliers threatening to cease their operations.
70 Billion cedis despite 45 billion cedis in Energy Levies
Mahama disclosed that despite the previous administration collecting over 45 billion cedis through the Energy Sector Recovery Levy over the past eight years, the sector was left with a debt of 70 billion cedis as of December 2024.
This revelation has raised serious concerns about the management of funds and the financial health of state-owned enterprises in the energy sector.
Despite collecting over 45 billion cedis in energy sector levies over the last eight years, the outgone administration has left the Ghanaian people with an energy sector burdened with a staggering debt of 70 billion cedis as of December 2024,
State-owned enterprises struggling to survive
The president expressed deep concern over the financial distress faced by state-owned enterprises in the energy sector.
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He warned that without urgent intervention, many of these entities risked collapse, which would have far-reaching consequences for the economy and the delivery of affordable electricity to Ghanaians.
It is of deep concern that several state-owned enterprises in the energy sector are struggling to stay afloat.
Unless urgent interventions are made, many of them will go under
Mahama cautioned.
Financial distress in the energy sector remains a significant obstacle to delivering consistent and affordable electricity to Ghanaians and poses an existential threat to our economy in general.
Postponed maintenance activities and emergency measures
Mahama also highlighted the postponement of critical maintenance activities, such as the pigging of the West African Gas Pipeline (WAGP), from 2024 to 2025.
This delay, coupled with insufficient contingency measures for alternative fuel supply, forced his administration to mobilise emergency resources to secure fuel supplies and ensure uninterrupted electricity generation.
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Compounding these challenges, critical maintenance activities such as the scheduled pigging of the West African Gas Pipeline were postponed from 2024 to 2025 without sufficient contingency measures for alternative fuel supply
Mahama explained.
As a result, my administration has had to swiftly mobilise resources to secure emergency fuel supplies to ensure that electricity generation continues despite the closure of the West African Gas Pipeline.
He added that the pigging exercise is expected to be completed by the first week of March, with gas supply from Nigeria anticipated to resume shortly thereafter.
We are anticipating a marked improvement in the power situation once this begins.
Commitment to reforms and sector stability
Despite the challenges, President Mahama reiterated his administration’s commitment to restoring stability in the energy sector.
He announced far-reaching reforms aimed at addressing the sector’s financial woes and ensuring sustainable operations.
These reforms include enforcing a single revenue collection account, strictly adhering to the Cash Waterfall Mechanism, and eliminating wasteful expenditures by state utilities.
While the current state of our energy sector poses grave concerns, we must remain resolute in our commitment to restoring stability.
Mahama declared.
I have directed the Minister for Energy and Green Transitions to implement far-reaching reforms, including enforcing a single revenue collection account, strictly adhering to the Cash Waterfall Mechanism, and eliminating all wasteful expenditures by the state utility.