In a move that’s sure to spark debate, President Mahama has defended the recent increase in the Energy Sector Levy Act (ESLA), framing it as a critical step to stabilize Ghana’s energy sector and broader economy. According to Mahama, the country’s energy sector is burdened by a staggering US$3.1 billion in debt, with an additional US$1.8 billion needed to ensure uninterrupted thermal power generation in the coming months.

Mahama argues that this debt poses a significant threat to Ghana’s fiscal consolidation and macroeconomic stability, potentially undermining national productivity and industrial growth. To address this, Parliament approved an amendment to ESLA, adding GHc1 to the Energy Sector Recovery Levy. This decision, though difficult, is deemed necessary to generate an estimated GH¢5.7 billion annually.

The President has assured the public that these funds will be “strictly ring-fenced” to pay down legacy energy debts, finance ongoing fuel purchases, and prevent recurring power shortages. Emphasizing transparency, Mahama stated that the funds will not be subject to the consolidated fund’s hazards and will undergo regular audits with public reports. As Ghana anticipates increased gas supply from ENI Sankofa, Jubilee, and Ten fields, the reliance on fuel purchases is expected to decrease, further solidifying the energy sector’s financial footing.