Mahama Reveals GHS 70bn Debt, Warns of Imminent Collapse and Announces Sweeping Power Reforms

President John Dramani Mahama has revealed that his administration inherited an energy sector on the brink of collapse, burdened by massive debt and operational challenges that threaten electricity supply and economic stability.

Delivering his State of the Nation Address on February 27, 2026, the President said unsustainable liabilities and delayed maintenance activities have placed enormous strain on power generation, with several Independent Power Producers and fuel suppliers reportedly threatening to halt operations.

According to the President, despite more than GHS 45 billion collected in energy sector levies over the past eight years, the previous New Patriotic Party administration left behind an energy sector saddled with about GHS 70 billion in debt as of December 2024.

He warned that several state-owned energy enterprises are struggling to remain operational and could collapse without urgent intervention. The financial distress, he noted, remains a major barrier to delivering reliable and affordable electricity and poses what he described as an “existential threat” to the economy.

The President disclosed that critical maintenance work on the West African Gas Pipeline Company system, including scheduled pigging, was postponed from 2024 to 2025 without adequate contingency planning.

As a result, his administration had to mobilise emergency fuel supplies to keep power generation running. He indicated that the maintenance exercise is expected to be completed in early March, after which increased gas flows from Nigeria should significantly improve the power situation.

To restore stability, the President has directed sweeping reforms under the Ministry for Energy and Green Transitions. These include enforcing a single revenue collection account, strict adherence to the Cash Waterfall Mechanism and eliminating wasteful expenditures.

An advisory committee has also been formed to guide private sector participation in metering and billing to improve efficiency and reduce commercial and technical losses affecting the Electricity Company of Ghana.

He cited the successful pilot partnership between ECG and Enclave Power Limited, which manages metering and billing in the Free Zones enclave, achieving about 99% revenue collection and near-perfect power uptime.

The government expects similar efficiency gains nationwide to reduce losses, lower tariffs and improve service delivery. The administration also plans to achieve full gas utilisation for electricity production and phase out crude oil use—a move projected to save hundreds of millions of dollars in fuel imports.

The President announced plans to operationalise a Renewable Energy and Green Transition Fund to accelerate investment in sustainable energy infrastructure. Projects will include solar street lighting, rooftop and off-grid solar systems, electric vehicle charging stations and modern marine power systems.

These initiatives aim to reduce pressure on the national grid while positioning Ghana as a continental leader in green energy transformation.

Beyond electricity generation, the President expressed concern over a sharp decline in petroleum production, which he said has fallen by more than 32 per cent due to opacity, a difficult business climate and political interference that have driven major oil companies away.

He noted that the downturn is especially visible in the Western Region’s once-thriving oil hub.

President Mahama said that less than a decade ago, Sekondi-Takoradi was a bustling centre of oil fabrication, logistics and service activity. However, many facilities have now shut down, businesses have relocated and hundreds of workers have lost their jobs.

He assured residents of the Western Region that the government is committed to reviving the upstream petroleum sector by creating a more investor-friendly environment. Meetings with industry stakeholders, he said, have already yielded strong investor interest, with potential new investments expected to run into billions of dollars.

While acknowledging the gravity of the crisis, President Mahama pledged that his administration will pursue decisive reforms to stabilise the energy sector, restore investor confidence and ensure reliable, affordable power for Ghanaians.

He stressed that rebuilding the sector is not only essential for electricity supply but also critical for national economic recovery and long-term growth.

Click the link Puretvonline.com | WhatsApp Channel to join the WhatsApp channel

GOT A STORY?

Contact/WhatsApp: +233243201960 or manuelnkansah33@gmail.com