CSO Budget Forum Urges Sunset Clauses for Energy Levies Ahead of 2026-2029 Budget
As Ghana’s Ministry of Finance prepares for consultations on the 2026–2029 budget, the Civil Society Forum on Budget is calling for clear exit strategies for long-standing energy levies and tighter tax compliance enforcement.
The recommendations come amid concerns over Ghana’s rising public debt and the sustainability of its fiscal recovery. The budget is scheduled to be presented to Parliament on November 15, 2025.
Speaking at a consultative forum, Abdul Karim, Coordinator of the Civil Society Forum on Budget, warned against the indefinite extension of temporary measures such as the Energy Sector Levies Act (ESLA), introduced in 2015, and the GH¢1 per litre fuel levy passed in June 2025.
“These levies were brought in as short-term measures to address specific challenges,” Karim said. “However, instead of being phased out as intended, they’ve become permanent fixtures, with new ones continually being added. Citizens deserve transparency regarding when these measures will finally expire.”
The GH¢1 per litre fuel levy, expected to generate about GH¢6 billion annually for energy debt repayment and fuel procurement, has already faced implementation challenges, including two suspensions by the Ghana Revenue Authority (GRA) at the direction of the Finance Minister. The Energy Ministry attributed the delays to global market volatility and rising oil prices. Public discontent has also mounted, with the Ghana Private Road Transport Union (GPRTU) faulting the government for inadequate consultation.
Mounting Energy Sector Debt
The push for sunset clauses comes as Ghana contends with mounting energy sector liabilities. Finance Minister Dr. Cassiel Ato Forson recently cautioned that the sector is on the brink of collapse, weighed down by a $3.1 billion debt stock as of March 2025, covering arrears owed to Independent Power Producers (IPPs), state-owned firms, and fuel suppliers.
The World Bank has warned that the power utility’s financing gap could balloon to $9 billion by 2026 without urgent reforms. Similarly, the International Monetary Fund (IMF) has flagged the sector as a critical fiscal risk, noting that legacy debts stood at $2.1 billion (GH¢29.4 billion), equivalent to 2.8% of GDP, as of December 2023.
