Understanding Ghana’s Energy Crisis: Causes, Consequences, and the Future

Ghana, a growing West African nation, is facing a major energy crisis that’s impacting daily life and economic productivity across the country. Commonly referred to as “dumsor”, an Akan word meaning “off and on”, the crisis is characterized by frequent power outages that impact both urban and rural areas. This energy instability is not only frustrating for households but also damaging for industries, businesses, and public services.

One of the biggest challenges in the energy sector is the huge financial burden. In 2024 alone, the government spent approximately GH¢20.8 billion on energy, while the sector's debt increased by an estimated US$1 billion (Agyei, 2024). A major cause of this financial pressure is the excess capacity charges paid to Independent Power Producer (IPP); thus, the government pays for electricity that isn’t used; nearly 50% of the energy sector debt results from these unused energy payments (Agyei, 2024).

Ghana’s reliance on IPPs also raises other problems. These private companies now provide over 60% of the country’s electricity, giving them considerable control over the national supply. In early 2024, a key facility, the Sunon Asogli Power Plant, which supplies around 12–15% of the national load, temporarily shut down due to non-payment from the Electricity Company of Ghana (Longdon, 2024). Such events expose the vulnerability of depending heavily on private firms without stable financial arrangements.

In addition to financial issues, technical and infrastructure challenges are making the situation worse. Much of Ghana’s power infrastructure is outdated (Korsi Kdzokoto, 2024). There are frequent losses during transmission, old substations that need repairs, and a lack of modern equipment to handle fluctuations or peak-time demands (Korsi Kdzokoto, 2024). Without proper upgrades, the system remains fragile and prone to breakdowns (Korsi Kdzokoto, 2024).

Another major problem is fuel supply (Yunus Kemp, 2024). A significant portion of Ghana’s electricity comes from thermal plants that rely on natural gas (Yunus Kemp, 2024). However, supply interruptions from Nigeria, due to both technical faults and geopolitical tensions, often leave power plants unable to operate at full capacity (Yunus Kemp, 2024). This leads to power shortages, which then trigger nationwide blackouts.

Meanwhile, Ghana’s urban population continues to grow, increasing pressure on an already strained system. Current energy production levels haven’t kept up with rising demand, leading to frequent energy rationing and system overloads (Cui, Adu, Boamah , & Baffour G, 2024).

The economic consequences of this crisis are substantial. Small and medium-sized businesses, especially those without backup power options, are hit hardest. They lose customers, spoil inventory, and face increased operational costs (Cui, Adu, Boamah , & Baffour G, 2024).

On the social side, the erratic electricity supply disrupts critical public services. Hospitals, water treatment plants, and schools experience severe challenges during blackouts. For low-income households, the lack of consistent power can mean poor food storage, extreme indoor temperatures, and health complications (Cui, Adu, Boamah , & Baffour G, 2024).

Despite these challenges, the government is taking steps to fix the problem (Francis, 2025). By mid-2025, more than US$1 billion of the US$2.5 billion owed to power producers had already been restructured (Francis, 2025). This financial reform is intended to reduce dependence on costly emergency loans and create room for investments (Korsi Kdzokoto, 2024). Authorities are also working to involve private firms in billing and revenue collection to reduce electricity theft and improve payment systems (Francis, 2025).

On the renewable energy front, Ghana is expanding its capacity. The Kaleo Solar Power Station, which adds 28 megawatts to the national grid, is part of a broader plan to reduce dependence on fossil fuels (Longdon, 2024). Looking even further ahead, the country plans to build a 1,000-megawatt nuclear power plant by 2034. Firms from France, Russia, and China are competing to take on the project, showing international interest in Ghana’s energy transformation (Yunus Kemp, 2024).

To end with, Ghana’s energy crisis is the result of financial mismanagement, over-reliance on private producers, aging infrastructure, and unreliable fuel supplies. But there is hope. With current reforms, renewable investments, and long-term nuclear plans, Ghana is working to secure a more stable and sustainable energy future. The success of these efforts, however, depends heavily on consistent policies, good governance, and strong public-private partnerships.

 REFERENCES

1. 1. Agyei, I. K. (2024, April 7). My Joy online. Retrieved from My Joy online website: https://www.myjoyonline.com/ghanas-looming-energy-sector-crisis/#google_vignette
2. 2. Cui, Y., Adu, D., Boamah , B. k., & Baffour G, E. (2024). The State of Energy in Ghana and The Need for International Cooperation for Its Potential Resource Development. E3S Web of Conferences 545, 6.
3. 3. Francis, K. (2025, may 13). Reuters. Retrieved from Reuters website: https://www.reuters.com/world/africa/ghana-aims-reduce-25-billion-debt-owed-power-producers-by-year-end-2025-05-13/
4. 4. Korsi Kdzokoto. (2024, september 25). B&FT online. Retrieved from B&FT online website: https://thebftonline.com/2024/09/25/the-energy-sector-crisis/
5. 5. Longdon, B. (2024, October 16). Citi News Room. Retrieved from Citi News Room website: https://citinewsroom.com/2024/10/sunon-asogli-shutdown-may-force-ghana-to-import-more-power-ies/
6. 6. Yunus Kemp. (2024, June 20). ESI Africa. Retrieved from ESI Africa website: https://www.esi-africa.com/industry-sectors/transmission-and-distribution/ghana-energy-crisis-worsened-by-shortage-of-gas-supply-from-nigeria/

GREDA GREEN BUILDING CALLS FOR SECOND TRAINING 2025

The Executive Committee of the Ghana Real Estate Developers Association (GREDA), Office of the Green Building Certification System is pleased to invite you to participate in an exclusive Green Building Certification Assessors Training Course, organized in collaboration with GREDA Secretariat. This course is tailored to enhance your expertise in sustainable construction practices and prepare the individual to become a green building assessor nationally recognized. 

Details of the Training Course

Date: TBD

Time: 8:00 am to 12:00 pm

Venue: KNUST, Kumasi-Ghana

Why Attend? 

The construction industry is rapidly evolving, with sustainability and environmental stewardship becoming central to modern practices. This training will: 

• Equip the individual with knowledge for the assessment of residential buildings. 
• Equip trainee with the knowledge and skills to incorporate green building standards into building projects. 
• Position your organization as a leader in sustainable real estate development.
• Gives the opportunity to train and have an in-house green building certification officer.

Who Should Attend? 

This course is designed for all built environment professionals, including developers, architects, engineers, project managers, and other professionals keen on advancing their knowledge in green building practices. Registration Information.

To secure your spot, kindly register by the 18th of July 2025, using the link below or contact the GREDA Secretariat for further assistance. 

• Contact Email: gredagbc@gmail.com 

• Contact Phone: 0256039634 / 0248645557 

Participation Fee: USD$250.00 

Spaces are limited, and we encourage you to confirm your attendance promptly. This training is an invaluable opportunity to contribute to Ghana’s sustainable development goals while gaining a competitive edge in the real estate market. We look forward to your active participation.