BY Issah Olegor
Former Minister for Finance, Dr. Mohammed Amin Adam, has ignited fresh controversy over the Mahama administration’s claims of having “rescued” the energy sector through the payment of US$1.4 billion in outstanding debts, insisting that such payments are neither unprecedented nor unique.
According to him, the governing National Democratic Congress (NDC) is engaging in what he describes as excessive public relations over routine fiscal obligations that were equally met by the previous New Patriotic Party (NPP) government without fanfare.
In a public statement reacting to recent praise being heaped on the Mahama government, Dr. Amin Adam disclosed that official records contained in the 2025 Budget Statement itself show that the Akufo-Addo-led NPP administration paid approximately US$1.4 to US$1.5 billion in energy sector debts in 2024.
He argued that portraying similar payments in 2025 as extraordinary achievements amounts to a selective presentation of facts designed to score political points rather than offer Ghanaians a full picture of the sector’s long-standing challenges.
Drawing from his tenure at the Ministry of Finance, Dr. Adam outlined the structural weaknesses that have consistently driven energy sector financing shortfalls, irrespective of which political party is in power.
These include poor revenue collection, high technical and commercial losses in power distribution, expensive generation costs due to limited competition and low renewable energy penetration, non-cost-reflective tariffs, weak adherence to the Cash Waterfall Mechanism (CWM), inefficiencies within state-owned energy enterprises, and the provision of subsidies to certain private sector operators.
He noted that these inefficiencies have forced successive governments to divert scarce public resources into the energy sector at the expense of development priorities.
In 2024 alone, the Ministry of Finance supported the sector with payments totalling about US$1.5 billion, equivalent to roughly GH¢20.8 billion.
Dr. Amin Adam stressed that these funds could otherwise have been invested in roads, schools, hospitals and other social infrastructure if the sector’s deep-rooted inefficiencies had been resolved.
Budget data from 2024 show that a significant portion of these payments went into settling legacy debts owed to Independent Power Producers (IPPs) such as Karpowership, Amandi Energy, Cenpower, AKSA Energy, Cenit Energy and Sunon Asogli.
Additional payments were made to fuel suppliers, including Sankofa Gas partners through letter of credit drawdown repayments and invoices, as well as to WAPCO, Tullow Ghana, Chase Petroleum and Stratcon Limited.
State-owned institutions such as the Electricity Company of Ghana (ECG), Bui Power Authority and Africa Energy Investment Corporation also benefitted from these interventions, with total energy sector shortfall payments in 2024 amounting to about US$1.46 billion.
Despite this heavy spending, Dr. Amin Adam warned that the energy sector’s financial position remains fragile. He referenced findings by the Energy Sector Recovery Programme (ESRP) financing modelling team, which estimate that the Business-as-Usual energy sector financing shortfall has risen sharply to about US$2.23 billion for 2025, even after the substantial payments made in 2024.
The cumulative shortfall for the 2023–2026 period, he noted, runs into several billions of dollars, underscoring the scale of the challenge confronting the Mahama administration.
The former finance minister’s remarks echo earlier assertions by former President Nana Addo Dankwa Akufo-Addo, who, in his final State of the Nation Address in January 2025, maintained that his government inherited a crippled energy sector plagued by dumsor but succeeded in stabilising it and keeping the lights on throughout its eight-year tenure.
President Akufo-Addo stated that through tough negotiations with IPPs, prudent financial management and targeted interventions, his administration prevented the energy sector legacy debt from ballooning beyond US$2.5 billion — the same level it inherited — and averted a projected US$12.5 billion debt scenario despite rising global energy costs and economic shocks.
Against this background, Dr. Amin Adam argues that the current debate should move beyond political praise-singing to a more honest assessment of the energy sector realities.
While acknowledging that debt payments are necessary to keep the system functioning, he insists they do not, on their own, amount to structural reform.
Without tackling the underlying inefficiencies that continue to generate annual shortfalls, he warned, no amount of public relations can disguise the fact that the sector remains a major fiscal risk to the country.
