The International Monetary Fund (IMF) says Ghana’s improving energy-sector fiscal performance is being driven by the appreciation of the cedi, stronger revenue collection by the Electricity Company of Ghana (ECG), and improved 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 lower electricity generation costs had also contributed to the improvement.
Speaking to Bernard Avle on Channel One TV on Monday, August 24, 2026, Dr Alter explained that a significant share of the government’s energy-sector expenditure was denominated in US dollars.
According to him, fuel suppliers and independent power producers (IPPs) are largely paid in dollars, meaning the cedi’s recent appreciation has lowered the local-currency cost of those payments.
“The government in the 2025 budget had in mind a certain exchange rate, and most of the expenses on the energy side are in dollars. Imports of fuel, so fuel suppliers are paid in dollars, all the IPPs are paid in dollars,” he said.
“When you translate that into cedis, if the currency appreciates, then there is an improvement,” he added.
Dr Alter, however, noted that the stronger cedi was not the only factor responsible for the improvement in the sector’s fiscal position.
“There has been slightly better revenue collection at the ECG. There has been a better implementation of the cash waterfall mechanism,” he said.
He further pointed to the government’s efforts to manage the energy mix more efficiently and reduce electricity generation costs.
He said greater use of locally produced natural gas had helped reduce the country’s reliance on expensive imported liquid fuels.
“The government has been more careful about the energy mix and trying to reduce the costs of producing electricity. Using domestically produced gas is much better than importing liquid fuel from abroad,” he said.
Dr Alter said the combined impact of the measures was strengthening the profitability of the energy sector while reducing the fiscal risks it poses to the government.
“All these measures are essential to the sector’s profitability and eventually reducing the fiscal risks to the government,” he said.
