The Ministry of Energy and Green Transition has defended the absence of a sunset clause in the new GH¢1 Energy Sector Recovery Levy (ESRL), stating that the government’s immediate priority is to fix entrenched inefficiencies within Ghana’s power sector before considering any timeline for ending the tax.
Public Relations Officer of the Ministry, Richmond Rockson, speaking on TV3’s Key Points programme on Saturday, June 7, said the government is focused on addressing longstanding financial and operational challenges, not on setting arbitrary dates for the removal of the levy.
“There were huge inefficiencies in the energy sector. There is no sunset clause on the levy because we want to focus on fixing the challenges first,” Mr Rockson explained.
His remarks come in response to calls by energy expert and legal practitioner, Kwame Jantuah, for the inclusion of a sunset clause to ensure that the GH¢1 levy does not become a permanent fixture.
Mr Rockson acknowledged public concerns, pointing out that while the original Energy Sector Levies Act (ESLA), passed in 2015, did include a five-year sunset clause, that provision was eventually set aside. From 2017 onwards, he noted, portions of ESLA funds were redirected to unrelated uses, including pension payments.
“We don’t want to repeat that cycle,” he said. “This time, the government’s aim is to use the levy strictly to clear the power sector’s crippling debts and build a foundation for long-term sustainability.”
Painting a grim picture of the energy sector’s current state, Mr Rockson revealed that Independent Power Producers (IPPs) are owed more than $1.75 billion, while Ghana spends an average of $1.2 billion annually on liquid fuels due to the dominance of thermal power in the national energy mix.
He also cited inefficiencies at major agencies such as the Electricity Company of Ghana (ECG) and the Ghana Grid Company (GRIDCo), alongside an ageing, poorly maintained distribution infrastructure, as factors compounding the crisis.
“For two years, major maintenance works at ECG were delayed due to funding issues. This must change,” he added.
To allay fears that the fuel levy might become another permanent tax without accountability, Mr Rockson stated that President John Dramani Mahama had committed to full transparency, including regular audits and public updates on how the funds are used.
“The President has gone further this time — the people of Ghana will be updated consistently on the use of the funds. The levy will not become a victim of misuse, as happened in the past,” he assured.
He emphasised that revenue from the levy will be strictly dedicated to clearing debt, developing gas infrastructure, and addressing procurement and operational inefficiencies in the sector.
“Once we address the key inefficiencies and clear the debt, that will create room to review the levy,” Mr Rockson explained. “For now, the focus must be on restoring a robust, reliable energy sector — not setting an artificial end date.”
President John Mahama signed the amended Energy Sector Levies Act into law on Thursday, June 5, 2025.
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