Ghana’s energy sector may be headed for yet another financial collapse—despite the government’s triumphant announcement of US$250 million in savings from renegotiated power contracts. This is the stark warning from the Institute of Statistical, Social and Economic Research (ISSER), which says the 2026 Budget glosses over deep, unresolved structural failures threatening the entire sector.
At ISSER’s Post-Budget Discussion on Wednesday, November 19, 2025, Director Prof. Robert Darko Osei dismantled the government’s narrative of progress, revealing that the country’s transmission and distribution network is hemorrhaging power—and money—at a rate that makes renegotiated deals almost meaningless.
“Our transmission losses are around 27%. That is significant,” Prof. Osei said, emphasising a figure far above global norms. Such losses translate directly into billions of cedis in unpaid electricity, unbilled power, and escalating sector debt.
While the Electricity Company of Ghana (ECG) has recorded marginal improvements in commercial losses and revenue collection, ISSER says the real problem lies untouched: a dysfunctional distribution system crippled by outdated infrastructure, poor metering, political interference, and chronic underinvestment.
“That is not to say that you can get away with such high transmission costs. So the ECG discussions will have to go on,” Prof. Osei noted, hinting at long-standing political reluctance to tackle ECG’s structural problems.
ISSER’s analysis points to a disturbing pattern: Ghana repeatedly renegotiates IPP contracts, restructures debt, celebrates temporary relief—and returns to crisis within a few years. Without fixing distribution, ISSER warns, Ghana will continue borrowing to pay for losses created within its own system.
“If we don’t get our distribution right… we’ll still negotiate with the IPPs and pay, spreading our debts over a longer period. But we’ll still have debt to pay because it will not translate to making the IPPs profitable,” he cautioned.
Energy economists say this cycle has already pushed the sector to the edge, with government now relying on stopgap measures and renegotiations rather than reforms. ISSER’s message is blunt: Ghana is buying time, not solving the problem.
The institute insists the fiscal space created by the renegotiations must be used to overhaul power-sector governance, reduce technical and commercial losses, and establish a transparent, sustainable pricing regime—before the country faces another full-blown energy sector bailout.
