Home Headlines Ghana Energy Levy Lacks Accountability Safeguards, Expert Warns

Ghana Energy Levy Lacks Accountability Safeguards, Expert Warns

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Dr Steve Manteaw
Dr Steve Manteaw

Dr. Steve Manteaw, Co-Chair of the Ghana Extractive Industries Transparency Initiative (GHEITI), has cautioned the government against repeating past policy errors following Parliament’s approval of the Energy Sector Levy (Amendment) Bill.

The legislation imposes a GHS1 increase per litre on petroleum products.

In a Facebook post, Dr. Manteaw described the levy as “well intended but lacking strong accountability mechanisms.” He warned that without explicit transparency and oversight measures, the funds risk misapplication, citing the Tema Oil Refinery (TOR) Debt Recovery Levy as a precedent where a levy persisted beyond its original purpose.

Dr. Manteaw urged the inclusion of a “sunset clause” in the legislation to prevent it from becoming a “perpetual burden” on citizens. He also highlighted potential inflationary consequences, stating the levy could increase transport fares and food prices, contradicting government goals to reduce living costs. “The tax is too onerous if placed on a litre of petroleum products,” he wrote. “It should rather be placed on a gallon, or reduced to 25 pesewas per litre to moderate its impact on consumers.”

Instead of imposing the levy, Dr. Manteaw suggested the government utilize gains from the cedi’s appreciation and rising global prices for gold and cocoa to address the energy sector debt. The levy is projected to raise GHS5.7 billion to help settle a $3.1 billion energy sector debt and secure 2025 thermal power fuel supply.

The measure faces opposition, including from Parliament’s Minority, who criticize it as excessive and poorly timed.

This levy reintroduction tests Ghana’s commitment to transparent fuel taxation amidst persistent energy sector financial challenges.

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