ESLA Collections for 2024 Underperform by GHS 553 Million as Gov’t Mobilize GHS 8.67 Billion
Collections under the Energy Sector Levies Act (ESLA) in 2024 fell short of the revised target by GHS 553.92 million representing a 6% decline, according to the 2024 Annual Report on the Management of Energy Sector Levies and Accounts released by the Ministry of Finance.
Despite being an improvement over the 11% shortfall recorded in 2023, the 2024 performance continues a pattern of underperformance, with an 8% gap also recorded in 2022.
The Finance Ministry attributed the persistent underperformance to prevailing commercial and technical losses within the energy sector, alongside mounting unpaid invoices by consumers of petroleum and electricity.
These systemic issues the report notes, continue to undermine the effectiveness of the levy.
Collection Trends and Revised Targets
An amount of GHS 9.59 billion was initially projected for collection in 2024. However, this was revised downward to GHS 9.23 billion in the Mid-Year Review of the Budget following a downward adjustment of the non-oil nominal GDP, which in turn affected projections for the Road and Energy Fund Levies.
Despite the underperformance relative to the 2024 revised target, collections still marked a 12.1% increase over the 2023 target of GHS 8.23 billion.
Actual collections for 2024 closed at GHS 8.67 billion, underscoring the scale of the shortfall and the continuing challenges in the efficient collection and management of energy-related levies.
Lodgment Performance and Utilization
The report further disclosed that actual lodgments into ESLA accounts lagged behind collections by GHS 600.78 million, representing a 7% shortfall of the GHS 8.67 billion target. Nonetheless, the amount lodged exceeded that of 2023 by 17.4%.
Approximately 75% of the funds lodged in 2024 were utilized – a pattern consistent with the previous year – reflecting a persistent challenge in converting collected levies into full lodgments and subsequent disbursements.
ESLA Bond Programme Winds Down
Of note in the 2024 report was the winding down of the ESLA Bond Programme and E.S.L.A. PLC, the special-purpose vehicle created to securitize ESLA flows. The cessation of the bond programme signals a significant structural change in the financing arrangements within the energy sector.
Commenting on the findings, Finance Minister Dr. Cassiel Ato Forson observed that the ESLA performance figures are indicative of deep-seated challenges in the energy sector, which if unaddressed, pose broader macroeconomic risks.
“The updates on ESLA performance in the 2024 report are only a symptom of widespread malaise in the energy sector and the attendant risks it poses to the entire economy. What I know is that we can work harder and together to enable ESLA to fully achieve its purpose and advance energy security,” Dr Forson stated.
