By Dominic Hlordzi
Ghana’s transition from the International Monetary Fund’s (IMF) Extended Credit Facility (ECF) programme to a non-financing Policy Coordination Instrument (PCI) is expected to keep pressure on reforms in the country’s energy sector, particularly efforts to address financial inefficiencies and operational losses within state-owned power institutions.
The IMF, after completing discussions on the final review of Ghana’s ECF programme, identified the energy sector as one of the key areas requiring continued reforms to safeguard the country’s economic stability.
According to the Fund, persistent financial challenges in the energy sector continue to pose fiscal risks to the economy. These include high distribution and collection losses, weak revenue mobilisation and the accumulation of arrears within the electricity value chain.
The IMF specifically pointed to the need for reforms at the Electricity Company of Ghana (ECG), including measures aimed at improving operational efficiency, reducing losses and strengthening revenue collection. The Fund also stressed the importance of lowering power generation costs and advancing private sector participation in electricity distribution.
Under the new PCI arrangement, Ghana will no longer receive direct IMF financial support under the programme. Instead, the PCI is expected to support government efforts to maintain economic reforms and policy discipline through regular monitoring and policy coordination.
For the energy sector, analysts say this means reforms already initiated under the ECF programme are likely to continue, especially those aimed at reducing fiscal pressures from state-owned energy institutions and improving efficiency within the power sector.
The IMF noted that sustained reforms in the energy sector remain important to protecting Ghana’s recent economic gains and ensuring long-term fiscal stability.
