The Centre for Environmental Management and Sustainable Energy (CEMSE) has welcomed the government’s decision to allocate more than GH¢6 billion in the 2026 Mid-Year Budget to settle legacy debt and procure fuel for power generation, describing the move as a positive step towards stabilising Ghana’s energy sector.
However, the policy think tank has warned that weak revenue mobilisation by the Electricity Company of Ghana (ECG) continues to pose a significant threat to the sector’s long-term financial sustainability.
Speaking in an interview with 3Business, the Executive Director of CEMSE, Benjamin Nsiah said the 2026 Mid-Year Budget Review reflects important reforms being implemented by the ministries of Finance and Energy to tackle the power sector’s longstanding debt challenges.
The Executive Director also added that, the Finance Ministry’s allocation of over GH¢6 billion to clear legacy debt and finance fuel purchases for power generation will help sustain electricity supply and reduce financial pressure on the energy sector.
“The 2026 Mid-Year Budget Review looks positive because it highlights reforms introduced by the Ministry of Finance and the Ministry of Energy across the power and energy sectors to reduce the debt distress situation. The allocation of over GH¢6 billion to defray legacy debt and procure fuel will help sustain the flow of power,” he said.
Despite welcoming the intervention, Nsiah raised concerns over the government’s continued struggle to recover adequate revenue from electricity consumers.
He pointed to the budget’s disclosure that the Electricity Company of Ghana (ECG), which distributes about 80 per cent of electricity generated in the country, is collecting only about 57 per cent of expected revenue from end users.
“ECG, which takes about 80 per cent of the power generated, is still unable to collect sufficient revenue from utility consumers. The budget indicates that only about 57 per cent of revenue is being collected from end users. This is a major challenge if we are to address the power sector’s debt situation and reduce the need for government to continue allocating huge fiscal resources to service these debts instead of investing in social protection and other economic activities,” he noted.
The Executive Director also stressed that while the reforms outlined in the budget represent progress, improving revenue collection remains essential to restoring the financial health of the energy sector.
He added that stronger revenue mobilisation would help reduce the sector’s debt burden and lessen the recurring dependence on government.
By Coffie Mawuedem Noel
