Minister for Government Communication, Felix Kwakye Ofosu, says the country’s massive energy sector debt stems from deliberate policy failures and mismanagement by the previous NPP administration.
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Speaking on JoyNews’s Newsfile, Mr. Kwakye Ofosu linked the GH¢67 billion energy debt to poor tariff design and reckless handling of the cedi under the former government.
“Even before we assumed office and we’ve only been in government for six months, we inherited GH¢67 billion in legacy energy debt,” he said.
He explained that the Electricity Company of Ghana (ECG) has struggled with consistent operational losses. According to him, the existing tariff system doesn’t cover the full cost of power production and distribution.
“Even if ECG collected all outstanding payments, it still wouldn’t match the actual cost of producing and distributing electricity,” he added. “That’s because the tariff system under-recovers, and this has been a problem for decades.”
Kwakye Ofosu also criticized the former administration’s decision to remove fuel costs from the electricity tariff. He said that move shifted the financial burden to the state, but the government failed to pay its share.
“Fuel, a critical input for power generation, was excluded from the tariff. Cabinet at the time decided consumers shouldn’t pay for it, but the government also didn’t cover the cost,” he explained. “A large portion of that fuel remains unpaid for, and that’s part of the debt we’re now facing.”
He also blamed the former Vice-President, Dr. Mahamudu Bawumia, for letting the exchange rate spiral out of control. That, he said, made matters worse.
“From July to November 2022, the cedi fell from 6 to 17 against the dollar. Since Independent Power Producers are paid in dollars, this massive depreciation caused the energy debt to balloon,” Kwakye Ofosu noted.
