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Ghana’s efforts to stabilize its energy sector have shown modest progress with ECG’s 2025 monthly collections exceeding GH¢1 billion, according to the latest Ghana Country Report by the International Monetary Fund (IMF).
The report highlights key developments in tariff adjustments, regulatory reforms, and the ongoing implementation challenges facing the Electricity Company of Ghana (ECG) and Independent Power Producers (IPPs).
“Compliance with the Cash Waterfall Mechanism (CWM) improved somewhat in 2025, with monthly ECG collections exceeding the minimum GH¢1 billion,” the IMF said, reflecting better revenue mobilization.
Despite the improvement, the IMF notes that some Independent Power Producers received less than expected. This shortfall is attributed to the diversion of funds for fuel purchases and the entry of a new IPP into the distribution pool, which further diluted the already constrained CWM allocations.
The Public Utilities Regulatory Commission (PURC) in April approved a 14.75% increase in electricity tariffs. This comes after the Commission kept tariffs unchanged during its December 2024 and March 2025 quarterly reviews. The upward adjustment signals the government’s intent to gradually close the gap between power generation costs and consumer payments.
According to the report, Cabinet has endorsed a new strategy to open power distribution to private sector participation, a structural benchmark expected to be achieved by the end of September 2025.
However, the report also highlights ongoing operational inefficiencies within ECG. The publication of ECG’s Revenue and Collection Accounts Validation Reports for the fourth quarter of 2023 and the year 2024, initially due by the end of January 2025, was delayed. The IMF attributes the delay to the extensive coverage period, which exceeded what was originally stipulated.
The 2024 report revealed that the CWM was not adhered to as planned. A significant deviation was noted between ECG’s declared collections of GH¢5.3 billion and actual disbursements through the CWM of GH¢3.9 billion. A substantial portion of the funds was reportedly redirected to cover emergency fuel purchases.
The IMF’s findings underscore the complexities of energy sector reform in Ghana. While recent actions signal political will and incremental progress, issues of transparency, adherence to financial frameworks, and equitable revenue distribution remain persistent challenges.