&w=64&q=75)
President John Dramani Mahama has criticised the previous Akufo-Addo administration for allegedly misappropriating the Energy Sector Levy (ESLA). He claimed the funds were diverted for purposes other than settling the energy sector debt, which was the levy’s original intent.
Speaking to representatives of the Ghana Independent Power Producers (IPPs) on Monday, 13 January, President Mahama acknowledged the ongoing energy crisis and highlighted the importance of implementing pragmatic solutions.
He recounted how his administration faced challenges in the sector, which necessitated the signing of Power Purchase Agreements with IPPs to enhance power generation. He explained that ESLA, introduced in 2015, was intended to address the sector’s debt issues but was mismanaged under the New Patriotic Party (NPP) government after the NDC left office in 2016.
He stated:
The more important and critical issue was the debt and paying down the debt that accumulated in the sector. And so we introduced the energy sector levy. And our anticipation was that looking at the revenues that were going to be generated by the energy sector within five years, we would have been able to clear the legacy debt. And so we passed the ESLA levy. But after we passed it, we left office in December, and a new government came in, and they had other ideas and other ways of trying to do things.
But unfortunately, one of the outcomes was that ESLA was not used for its intended purpose, and the revenues of ESLA were mismanaged. And so what should have gone to pay down a lot of the debt that has accumulated today was used for other purposes.
President Mahama also discussed efforts to address challenges in the sector, starting with the downstream petroleum sector.
The first thing is for us to deal with the issue of the value chain, the whole power value chain. And that means that we must start from the downstream, all the way upstream. There are issues to do with the availability of gas, and so that's upstream. How we get the companies in that space to increase exploration and bring on more gas so that we eliminate the use of fossil fuels and achieve our dream of gas-to-power 100%, which will bring down the cost of generation.
He also mentioned the possibility of privatising the Electricity Company of Ghana (ECG), citing its current inefficiencies in revenue collection and high losses. He described it as the “sick man of the power sector.”
I mean, you can’t run an electricity utility and make 40% commercial and technical losses and continue to think that you have a viable business. And so something must give in that sector. And that's why I've said that we are looking at introducing private sector participation.
President Mahama assured that his administration would collaborate with the Independent Power Producers to address the sector’s challenges effectively.