Francis AsanteThe recent introduction of a GH₵1.00 levy per liter on petroleum products aims to generate revenue to address the significant legacy debt in the power distribution sector, which currently stands at approximately $3.1 billion. This debt has been a contributing factor to the persistent power outages, commonly referred to as “dumsor,” affecting citizens across the country.
Historically, the issue of legacy debt in the power sector was initially addressed by the previous National Democratic Congress (NDC) government through the implementation of the Energy Sector Levies Act (ESLA). The primary objective of ESLA was to create a revenue stream from petroleum products to alleviate the financial burdens that have led to these outages. However, following the transition to the Akufo-Addo/Bawumia administration, there has been a concerning diversion of these funds. Instead of channeling the revenue generated from ESLA towards settling the legacy debts, a special purpose vehicle was created, which reportedly resulted in misappropriation of funds, leaving the original intent of ESLA unfulfilled.
In light of these challenges, the Movement for Change has called for immediate attention to the pressing issues within the power distribution sector. Prior to the upcoming 2025 budget presentation, we convened a press conference to highlight our concerns and propose viable solutions. We emphasized that privatizing the Electricity Company of Ghana (ECG) under the current economic conditions is not a feasible option. Instead, we advocate for innovative strategies to enhance efficiency in the power distribution sector.
To effectively tackle the legacy debt and resolve the ongoing power outages, we propose fostering public-private partnerships that focus on revenue collection and operational efficiencies within the power distribution framework. Such collaborations can help streamline processes and ensure adequate financial resources are directed towards mitigating the debt, thereby addressing the root cause of dumsor.
It is important to recognize that the recent imposition of additional taxes on citizens is not a sustainable solution. The government must prioritize creative and innovative approaches rather than resorting to taxing the populace further. The Movement for Change remains committed to presenting alternative policies that offer practical solutions to the current administration’s challenges.
In conclusion, it is essential for the government to adopt a more innovative mindset in addressing the energy sector’s issues. The current leadership lacks the moral authority to criticize the situation, given their role in exacerbating these challenges. We urge the government to take constructive steps towards fostering a more efficient and effective power distribution system for the benefit of all Ghanaians.
By Francis Asante, Finance Lecturer, USA, and Leading Member of the Strategic Forum of the Movement for Change
