The International Monetary Fund (IMF) is urging government to intensify efforts to shift Ghana’s energy mix toward cheaper fuel sources such as natural gas to lower power generation costs and ease financial pressures within the sector.
According to the Fund, the strategy is vital to reducing the country’s overreliance on costly liquid fuels, which continue to drain foreign exchange reserves and undermine the financial sustainability of power utilities.
The IMF believes prioritising gas and other affordable fuels could deliver substantial savings and strengthen the liquidity of key state-owned enterprises, including the Electricity Company of Ghana (ECG) and the Volta River Authority (VRA).
Speaking on Channel One TV’s Point of View with Bernard Avle, IMF Resident Representative to Ghana, Dr. Adrian Alter, said the Fund has consistently advised the government to adopt a clear “pecking order” in fuel selection that favours cost efficiency.
“What the IMF team has continuously advised the government is to have a pecking order for these fuels to choose the cheapest ones and to prioritise the cheapest fuels, such as gas and others, at the expense of liquid fuel, which is much more expensive,” Dr. Alter explained.
He noted that while hydropower accounts for 40–50 percent of Ghana’s generation mix, seasonal variations force heavier reliance on thermal power, which is often fuelled by imported oil.
Reducing this dependency, he stressed, is critical for stabilising generation costs and preserving fiscal space.
Dr. Alter added that ongoing efforts to ramp up domestic gas production align with the IMF’s advice for greater self-sufficiency.
“The strategy of the current government is to become more self-independent, self-gas-producing independent and that is an important milestone,” he said.
“If they can manage to ramp up domestic production of gas, then they could potentially make substantial savings with fuel purchases.”
He said maintaining momentum on this transition will be key to achieving cost-reflective, reliable, and financially sustainable energy supply in Ghana.
