Executive Director of Green Tax Youth Advocacy, Benaiah Nii Addo, wants the government to tackle the root causes of inefficiencies confronting Ghana’s energy sector, rather than burdening the citizens with new taxes.
Describing the government’s introduction of a 1-cedi levy on one litre of all petroleum products as a “regressive tax”, the tax analyst noted that successive governments have failed in resolving loopholes that have leaked revenues in the sector.
According to him, the introduction of certain levies by past administrations did not yield the expected outcome, as the sector is still saddled with huge debts.
These levies include the Energy Sector Recovery Levy and the Sanitation and Pollution Levy, which were expected to stabilize Independent Power Producers (IPPs) payments and reduce debts.
Other interventions, such as the IMF’s $3 billion bailout, conditioned on energy sector reforms, an increase in utility tariffs, cash waterfall mechanism, and the Power Purchase Agreement, have also failed to cushion the sector.
“All these interventions have failed to achieve power sector stability. The electricity supply remains unreliable. Consumers still face rising prepaid charges, and industrial players continue to operate on costly diesel generators due to an unstable power supply,” Nii Addo noted.
He therefore argued that the new ‘1 cedi, 1 Litre’ levy would not address the cash-crippling sector.
“This policy is not novel. It is part of a rollercoaster fiscal approach where the government reaches for low-hanging fruit, imposing taxes and levies without addressing the structural inefficiencies in the power sector. It is unconscionable to keep asking more from citizens who already receive less than basic utility services in return,” he said.
His organization observes the continuous deterioration of Ghana’s power sector, the widening inequality, and socioeconomic challenges that perpetuate on gender, youth, and women.
“Over the past five years, a series of economic policies, tax measures, and international bailouts have been touted by governments as solutions to Ghana’s power sector crisis. However, these have largely served as smokescreens, failing to resolve the core challenges while further burdening the average Ghanaian, especially the youth and women,” he noted.
Nii Addo cautioned against politicisation of the matter, urging the current government administration to take pragmatic measures to cease the revenue shortfalls.
“Equally, we caution the current opposition not to pretend to care for Ghanaians when they contributed significantly to the present mess. From poorly negotiated take-or-pay power agreements to the accumulation of debts to IPPs, their legacy continues to haunt us,” he noted
The tax expert is recommending meticulous traceability and publication of all expenditure records of the energy sector to the consistent losses and inefficiencies, while calling for civic consultations before implementing new tax systems.
“We call for the government to cease the fiscal maneuvers and commit to real reforms, rooted in transparency, equity, and inclusivity. Anything less is a betrayal of the trust of the Ghanaian people, especially the youth, women, and the class who inherit the consequences,” he concluded.
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