The International Monetary Fund (IMF) says Ghana’s improving energy-sector fiscal performance is being supported by the stronger cedi, improved revenue collection by the Electricity Company of Ghana (ECG) and better implementation of the cash waterfall mechanism.
IMF Resident Representative in Ghana, Dr Adrian Alter, said the government’s efforts to optimise the country’s energy mix and reduce electricity generation costs are also helping to strengthen the sector’s financial position.
Speaking on Channel One TV on Monday, August 24, 2026, Dr Alter explained that a large portion of Ghana’s energy-sector expenditure is denominated in US dollars. Fuel suppliers and Independent Power Producers (IPPs), for instance, are predominantly paid in dollars.
Stronger Cedi Reduces Energy Costs
According to the IMF representative, the recent appreciation of the Ghana cedi has lowered the local-currency cost of dollar-denominated energy payments.
He explained that the government’s 2025 budget was prepared based on a specific exchange-rate assumption. As the cedi strengthens against the US dollar, the amount of cedis required to settle energy-related dollar payments decreases.
ECG Revenue Collection Improves
Dr Alter stressed, however, that the stronger cedi is not the only reason for the improvement in Ghana’s energy-sector finances.
He identified better revenue mobilisation by ECG and improved implementation of the cash waterfall system as additional factors contributing to the sector’s stronger fiscal performance.
The cash waterfall mechanism is designed to ensure that revenue collected within the electricity supply chain is distributed more efficiently to key participants, including power generators and fuel suppliers.
Greater Use of Ghana’s Natural Gas
The IMF also pointed to the government’s efforts to improve Ghana’s energy mix and lower the cost of electricity generation.
Dr Alter said increasing the use of domestically produced natural gas could reduce Ghana’s dependence on costly imported liquid fuels, helping to lower electricity generation expenses.
The combined measures, he noted, are improving the profitability of Ghana’s energy sector while reducing the fiscal risks posed by the energy sector to government finances.
Source: newsthemegh.com