Govt Urged to Privatise ECG Operations
The International Monetary Fund (IMF) has urged Ghana to accelerate private sector participation in the operations of the Electricity Company of Ghana (ECG), warning that persistent inefficiencies in the power sector continue to pose risks to public finances and broader macroeconomic stability.
The call was contained in a statement issued at the end of a mission to Accra led by IMF mission chief Ruben Atoyan, following the sixth and final review of Ghana’s Extended Credit Facility programme.
The mission, which took place from April 29 to May 15, formed part of ongoing discussions between the Fund and Ghanaian authorities on reforms aimed at consolidating recent economic gains and strengthening long-term fiscal sustainability.
In its assessment, the IMF said addressing structural weaknesses in the energy sector would require urgent action to reduce distribution losses, improve revenue collection and enhance financial discipline within state-owned utilities.
It specifically called for the finalisation of private sector participation in the distribution segment of the electricity sector, particularly at ECG, as part of broader efforts to improve efficiency and reduce fiscal risks.
“In the energy sector, priority should be given to tackling distribution and collection losses at the Electricity Company of Ghana (ECG), including by finalising the private sector participation in the distribution sector, enhancing payment discipline, clearing legacy arrears, and reducing generation costs,” the Fund stated.
The Electricity Company of Ghana (ECG), the country’s main power distributor, has long faced challenges including high technical and commercial losses, revenue leakages and rising indebtedness within the energy value chain.
The IMF noted that while Ghana’s macroeconomic programme has delivered “substantial stabilisation gains,” continued reforms are necessary to sustain progress and prevent a reversal of recent improvements.
It cited declining inflation, improved external reserves, stronger currency performance and better-than-expected economic growth in 2025 as key positive developments under the programme.
However, the Fund cautioned that global risks remain elevated, particularly from geopolitical tensions that could drive up energy, food and fertiliser prices, with potential spillover effects on domestic inflation and fiscal pressures.
The IMF also confirmed that it has reached a staff-level agreement with the government on a new 36-month non-financing Policy Coordination Instrument (PCI), which will guide post-programme reforms.
The PCI is expected to support continued fiscal consolidation, improve governance of state-owned enterprises and strengthen debt sustainability without providing direct financial assistance.
Beyond the energy sector, the IMF reiterated concerns about quasi-fiscal activities, particularly at the Bank of Ghana, citing losses associated with the Domestic Gold Purchase Programme as a risk to the central bank’s balance sheet.
It also called for stronger reforms in the cocoa sector to improve efficiency and ensure the long-term sustainability of the Ghana Cocoa Board.
Despite the concerns, the Fund commended Ghana for what it described as “resilience and determination,” noting that significant progress has been made in stabilising the economy.
It, however, warned that sustaining the gains would depend on strict adherence to reforms and avoiding past policy lapses that contributed to the country’s earlier fiscal and debt challenges.
