Ghana’s Chamber of Petroleum Consumers has cautioned that public acceptance of the Energy Sector Recovery Levy will wane unless the government addresses fundamental inefficiencies in the power sector.
COPEC Executive Secretary Duncan Amoah told The High Street Journal that while the tax provides short-term relief for the sector’s $1.9 billion debt, it fails to solve systemic issues including governance failures and technical losses.
“Ghanaians understand the need for this levy now, but permanent taxes shouldn’t become substitutes for permanent reforms,” Amoah said. He cited the 27% distribution losses plaguing electricity providers and non-transparent power procurement processes as unresolved challenges making the sector unsustainable. The warning comes as fuel prices have risen 8% since the levy’s introduction despite stable global oil markets.
Energy analysts note the levy’s fragility as a solution, with Ghana having implemented similar measures since 2015 without achieving sector stability. The current IMF program includes energy reform benchmarks, but progress remains slow. Amoah urged immediate action on smart metering, competitive bidding for power purchases, and utility management overhauls before economic pressures and election cycles further constrain reform opportunities.
Ghana’s energy sector continues to grapple with circular debt despite multiple bailouts, with independent power producers owed $1.2 billion as of March 2025. The situation mirrors challenges across several African economies where short-term fiscal measures have failed to cure structural sector weaknesses.
