The International Monetary Fund (IMF) has asked Ghana to implement strict reforms to empower utility service providers to recover their costs for reliable and sustainable power for household and industrial use.

Ms. Catherine Pattillo, an IMF Deputy Director, and Mr. Luc Eyraud, Division Chief of the African Department at the IMF, made this statement during a press briefing in Accra.

They also called for an enabling environment for private sector players to increase renewable energy use and urged other African countries facing energy crises to replicate the same.

Ms. Pattillo noted that, like many other African countries, Ghana’s current tariff setup did not support high cost recovery by utility service providers, hindering their operational capabilities.

“Sometimes, the setup of the energy sector does not allow utilities to recover their costs from the charges they make to operate profitably and efficiently and supply energy as needed,” she said.

Regarding the Fund, she said, “we are always discussing with countries how to ensure that their energy sector, which often involves a number of State enterprises, is well managed to recover their costs and provide services.”

Mr. Eyraud emphasized the importance of recalibrating tariff systems, noting that it would help boost cost recovery.

He also called on the government to institute mechanisms that would increase the country’s share of renewable energy through enhanced private sector participation.

He mentioned South Africa as one country on the continent that had been doing well in the area of renewable energy, “by bringing in more private producers and reducing the barriers to enter the market.”

For the past few weeks, Ghana has been experiencing some erratic power outages largely attributed to financial challenges in procuring fuel for some power plants to operate at full capacity.

In an interview with the Ghana News Agency last week, Nana Amoasi VII, from the Institute for Energy Security (IES), emphasized the importance of resourcing the Electricity Company of Ghana (ECG) to solve the current power outages.

“We expect the Ministry of Energy to coordinate and work with the Ministry of Finance to find alternative funding sources to deal with the challenge, specifically to procure fuel to get some of the power plants online,” he said.

Meanwhile, the President, Nana Addo Dankwa Akufo-Addo, during his address at the 2024 May Day celebration in Accra, expressed optimism about sustained power, indicating that some challenges in the sector had been resolved.

“Over time, the issues surrounding transformers and gas supply have been successfully resolved, resulting in a significant improvement in power supply reliability,” he said.