ESLA: GHS 45 Billion Generated From Levy Since 2017, Energy Minister-Designate Says
The Energy Sector Levies Act (ESLA) has generated approximately GHS 45 billion ($3.05 billion) since its implementation but has failed to stem and reduce the mounting debt in the energy sector with Ghana’s energy sector debt ballooning to $3 billion, according to Energy Minister-designate John Jinapor.
Speaking during his vetting before Parliament’s Appointments Committee on Monday, January 13, Mr. Jinapor noted that the energy sector’s liabilities have grown significantly from $2.1 billion in 2017, despite ESLA being established to address this legacy debt and prevent further accumulation.
“ESLA was created to deal with the country’s energy sector debt of $2.1 billion as of 2017 and to halt the recurrence of debt accumulation. However, today, the reconciled figure stands at $3 billion (sic),” he stated.
ESLA’s Original Mandate and Divergence
The levy, which was initially intended to clear legacy debts and stabilize the energy sector, has faced criticism for deviating from its core purpose.
Energy policy expert and Executive Director of the Africa Centre for Energy Policy (ACEP), Ben Boakye, has highlighted how ESLA funds were converted into bonds under ESLA Plc, diluting its impact on debt reduction.
“We converted ESLA into bonds, diverting it from addressing the legacy debts in the sector. Administrative and managerial costs became so burdensome even on the ESLA itself, and we have a whole report that shows how wasteful we have been in the sector,” Mr. Boakye said.
Calls for Accountability and Reform
The growing energy sector debt underscores the need for a comprehensive review of ESLA’s implementation. Analysts argue that administrative inefficiencies and wasteful expenditures have undermined the levy’s effectiveness, leaving Ghana with a mounting financial burden.
The Minister-designate’s acknowledgment of the debt crisis, coupled with calls for reform from energy policy experts, signals a potential turning point for Ghana’s energy sector.
