Energy Sector Reforms Must Align with Broader Macroeconomy to Safeguard Gains – Deloitte

Amid the government’s renewed efforts to fix Ghana’s energy challenges, global consultancy firm Deloitte is urging policymakers to prioritize the implications of the sector reforms on the broader economy.

Deloitte is warning that energy sector improvements, while crucial, must be guided by broader macroeconomic considerations to truly deliver long-term benefits to businesses and households.

In its analysis of the 2025 Mid-Year Budget Review, Deloitte commended the government’s steps to stabilise and transform the energy sector. However, it issued a firm reminder that without proper debt control, transparency, and financial discipline, gains in the energy sector could be short-lived or even counterproductive.

“The 2025 Mid-Year Budget Statement highlights several key initiatives and challenges within Ghana’s energy sector, reflecting efforts to stabilise and transform the industry. However, these developments must be viewed within the broader macroeconomic context to fully understand their implications,” Deloitte said in its review cited by The High Street Journal.

Ghana’s energy sector has been plagued for years by crippling debts to Independent Power Producers (IPPs), fuel suppliers, and state-owned utilities. While the government has introduced new strategies for restructuring these debts, Deloitte says what’s missing is a clear, enhanced debt management plan. A plan that not only tackles past liabilities but also prevents future debt build-up.

“An enhanced debt management strategy is crucial to systematically reduce legacy debts and prevent future accumulation,” the review added.

These recommendations by Deloitte matter to both households and businesses since these debts are often paid using taxpayer funds, sometimes through indirect means like energy sector levies or tariff hikes.

If left unchecked, these can result in higher electricity prices for households, delays in infrastructure investment, and increased borrowing by the government, which can impact inflation and interest rates.

Deloitte says the reforms must be complemented with accurate and transparent financial reporting, along with regular audits, which will help maintain fiscal discipline and avoid discrepancies in revenue calculations and expenditure allocations.

This means the government must show working on how much revenue is collected from electricity tariffs, fuel taxes, levies, and where that money actually goes.

Without this, both local and international investors may hesitate to fund new projects, and confidence in government policy weakens.

For Deloitte, the energy reforms are crucial, but they are not a silver bullet. If not aligned with the broader economy, they risk becoming a new layer of financial burden instead of a solution.

In effect, the government, in the “reset the agenda” as the 2025 budget claims, must halt the energy sector being the fiscal black hole and start becoming a driver of growth, jobs, and investment.

Read More