Energy Analyst, Benjamin Nsiah has cautioned that the Energy Sector Levy Act (ESLA) is unable to fully address Ghana’s energy sector debt, highlighting a significant funding gap between available revenue and the country’s financial obligations.
According to Nsiah, while the sources of these debt are well known and predictable year after year, the country continues to struggle without a long-term, bipartisan solution to curb the problem.
“The sources of debt are known and each year we know how these things come off, but as a country, we have not built a consensus on how to resolve these debt issues once and for all,” he stated on Channel One TV’s The Big Issue.
He noted that ESLA was initially expected to resolve these financial challenges, but the current reality shows that the levy alone cannot sustain debt repayment.
“We thought that using ESLA we could have resolved this particular debt issue. But as we speak, ESLA cannot fund these debts,” Nsiah emphasised.
Nsiah outlined the specific breakdown of ESLA levies, clarifying that only a fraction of the scheme is directed toward debt servicing.
“ESLA cannot fund the debts because, on the levies, on the buildup, we have only the Recovery Levy and what we call the Energy Sector Recovery Levy,” he explained.
He further detailed the limitations of ESLA, pointing out that two electricity-related levies—the Public Lighting Levy and National Electrification Scheme Levy—do not contribute to debt repayment.
“The National Electrification Scheme Levy is for power infrastructure and not to pay debt. The Public Lighting Levy is for paying the usage of power by what we call the street lights, so they don’t also pay debt,” Nsiah clarified.
Regarding petroleum sector levies, Nsiah noted that even within the Energy Debt Recovery Levy, only a portion is allocated to power sector debt, with part of it designated for petroleum downstream operations.
“Energy Debt Recovery Levy and Energy Sector Recovery Levy give us only about GHS4.5 billion, as against a shortfall of about GHS27 billion as quoted in the appendix of the budget,” he warned.
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