President John Dramani Mahama has defended government’s decision to introduce a 1-cedi levy on petroleum products, describing it as difficult but necessary in stabilizing the economy.
Parliament on Monday passed a new law that imposed a levy of GHS1 on every litre of fuel.
Receiving the report on the National Economic Dialogue on June 4, the President expressed optimism that Ghanaians will appreciate the broader intent behind the move.
The National Economic Dialogue recognized growing energy sector liabilities as the greatest existential threat to fiscal consolidation and macroeconomic stability.
“Our energy sector carries a debt burden of over $3.1 billion with an estimated $1.8 billion more required to finance fuel procurements for uninterrupted thermal power generation in the coming months. If left unaddressed, this situation significantly threatens national productivity and industrial growth,” President Mahama said.
According to him, “While we have devised a strategy to liquidate this debt and stop the bleeding in the power sector,
President Mahama explained that, “The additional revenue projected is 5.7 billion cedis annually. This revenue will be strictly reinforced to pay down legacy energy debts, finance ongoing fuel purchases, and avert the risk of recurring power shortages. Funds from this levy will not be subject to the hazards of the consolidated fund.
And the minister is here. I know when money falls into the consolidated fund, it faces certain hazards. It will not be subject to the hazards of the consolidated fund.”
He further noted that, “ The fund will be regularly audited, and audit reports made public to ensure its transparent use. While initially much of this revenue will go into the purchase of fuel to ensure stable supply of electricity, with the ongoing developments in the upstream sector, we expect to receive more gas from our E&I, Sankofa, and Jubilee and TEN fields. With also the assurance of additional gas through the West-African Gas Pipeline, we expect to substantially reduce the use of liquid fuels in our energy mix.”
” With the recent gains in macro stability and strengthening of the Ghanaian cedi, this levy is not expected to result in any immediate fuel price increases at the pump. We are fully aware of the burden this will place on households and businesses, but I want to assure Ghanaians that this decision was not taken lightly,” The President stated.
He assured that, “the government will continue working to reduce systemic inefficiencies in the energy procurement and distribution sectors, while enhancing targeted social interventions for vulnerable groups.”
