President John Dramani Mahama has defended the contentious GH¢1 increase in the Energy Sector Recovery Levy (ESLA), characterizing it as a challenging yet essential measure to save Ghana’s power sector from impending collapse.
In a statement issued on Tuesday, the President disclosed that Ghana’s energy sector debt has surged to over US$3.1 billion, with an additional US$1.8 billion needed to secure fuel for reliable thermal power generation in the upcoming months.
Mahama cautioned, “The escalating liabilities in the energy sector pose the most significant existential threat to fiscal consolidation and macroeconomic stability.”
On Monday, Parliament approved the Energy Sector Levies Act (Amendment) Bill, 2025, under a certificate of urgency, sanctioning the GH¢1 increase. The amended levy is anticipated to generate GH¢5.7 billion annually, which the President asserts will be “strictly ring-fenced” to tackle legacy energy debts, ongoing fuel procurement, and ultimately avert recurring power outages.
Mahama stressed, “This decision, while difficult, is necessary and justifiable. If not addressed, this situation poses a significant threat to national productivity and industrial growth.”
The President indicated that the revenue from the levy will not be directed into the consolidated fund; rather, it will be subject to independent audits with regular public reporting to ensure transparency and accountability.
In the short term, the funds will be utilized to stabilize electricity supply through fuel purchases. However, with increased natural gas anticipated from Ghana’s ENI Sankofa, Jubilee, and TEN fields, along with the West African Gas Pipeline (WAGP), the government aims to reduce reliance on costly liquid fuels.
He remarked, “At that point, the resources generated by the increased levy will be allocated to settle accumulated legacy debts in the power sector.”
Source: HotFmOnline.com
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