Kwaku Azar Writes: Pair The Levy With Reform & Accountability
Our energy sector is in crisis, again. With a debt burden of $3.1 billion, depleted guarantees, and a growing reliance on thermal generation, the system risks collapse.
The government’s proposed amendment to the Energy Sector Levies Act (2025) is an attempt to stabilize the sector by increasing the Energy Sector Shortfall and Debt Repayment Levy.
The rationale is clear:
* First, we must restore exhausted guarantees—$512 million from the World Bank and $120 million from GNPC—that were fully drawn due to unpaid bills.
* Second, we face a massive shortfall because the cost of thermal fuel is excluded from electricity tariffs. Including it would spike tariffs by over 50%.
* Third, the government needs at least $1.2 billion this year alone to fuel thermal plants and avoid power outages.
The levy is earmarked to address these issues, without raising the ex-pump price of petrol or diesel due to forex gains.
Positives:
* Secures fuel to prevent power cuts.
* Averts a steep rise in electricity tariffs.
* Rebuilds financial credibility through restored guarantees.
Negatives:
•Reduces consumers’ fuel purchasing power (e.g., ₵400 buys 2.35 Liters less).
* Adds fiscal stress on households and businesses.
•Risks regressive effects, especially for the Kofi Brokemen, who are in the majority.
One may support or oppose the levy, but what’s indisputable is that a critical pillar is missing. That is where GOGO chooses to focus.
The Missing Pillar: Accountability
A levy without accountability is a bailout for failure. This crisis didn’t appear overnight. It is the result of:
* Inflated contracts and procurement abuse,
* Weak financial discipline among SOEs,
•Misuse of previous energy levies, and
•Neglect of Auditor-General and PURC warnings.
Without action against those responsible, the public will see this not as a path to recovery but as another unjust tax imposed to protect elite mismanagement.
To earn the trust of the citizens and break the cycle of energy bailouts, the levy must be paired with bold, visible reforms:
1. Accountability First
•Commission a forensic audit of the last 10 years of energy spending.
•Prosecute wrongdoing whether by public officials or private contractors.
•Recover stolen funds and debar corrupt suppliers from future contracts.
2. Transparent, Targeted Use
* Ring-fence levy proceeds for fuel and debt repayment only.
•Require quarterly public reporting on collections and usage.
•Demand performance metrics from all energy sector SOEs.
3. Structural Reform
•Gradually revise tariffs to reflect real costs.
•Renegotiate exploitative IPP deals.
•Accelerate investment in renewable and hydro energy to reduce fuel dependence.
4. Fiscal Discipline
•Make the levy time-bound, subject to regular performance reviews.
•Set clear, measurable targets (e.g., arrears reduction, fuel procurement benchmarks) linked to the levy’s continuation.
•Publish annual impact reports to show how much was collected, how it was spent, and what was achieved.
•Prohibit off-book diversions of levy proceeds such that funds can’t be redirected to unrelated expenditures.
•Require parliamentary reauthorization every two years to prevent silent extensions or permanent taxation by default.
•Cap the levy ceiling, with any proposed increase requiring justification backed by audited performance results.
Conclusion:
The levy may be necessary but it is not sufficient. We cannot be asked to tighten our belts while those who caused the looseness go free.
We need more than money. We need justice, reform, and discipline. This is not just about raising revenue. It is about restoring trust.
We cannot levy our way out of inefficiency. And we cannot fix a broken system by pouring money into it without fixing what broke it.
Let this be the last time we are being asked to pay for energy sector failure. Let it also be the first time those responsible are held to account.
