Government should be able to reduce its debt of $2.5 billion owed to independent power producers and gas suppliers by the end of the year, President John Mahama said on Tuesday.

Last year, government reached an agreement with independent power producers to restructure legacy debt of around $1 billion as part of efforts to deal with its overall debt burden.

But arrears to service providers have continued to pose a challenge to Ghana's economy since President Mahama was sworn in for a second term as president in January.

"I'm sure by next year, our partners would be happy because we would have dealt appropriately with the debt overhang," President Mahama told a forum in Ivory Coast.

He said that state-owned utility ECG was inefficient in collecting revenue and was experiencing losses of about 40%.

To be able to pay for electricity, Mahama said he was bringing the private sector into the billing process.

"People are queuing up, I said they should wait. We're going to do expressions of interest," President Mahama said when asked about interest from private investors.

The cabinet will decide whether Ghana should have one or multiple partners working on the billing, he said, adding that there must be local participation.

President Mahama also said companies should take advantage of oil and gas extraction before the world transitions to renewable energy.

"Oil is in transition and so everybody who has any assets should be pumping like there's no tomorrow ... I would lay a red carpet to anybody who wants to drill and pump oil to do so," he said.