Ghana’s energy sector financing faces renewed scrutiny after the government collected GH₵8.67 billion in Energy Sector Levies (ESLA) for 2024, missing its revised target by GH₵553.92 million.
While the 6% shortfall marks an improvement from 2023’s 11% deficit, it extends a three-year trend of underperformance, following gaps of 8% in 2022 and 11% the previous year.
The Ministry of Finance’s latest annual report reveals persistent challenges in revenue collection and fund utilization. Despite a 12.1% year-on-year increase from 2023’s GH₵8.23 billion target, only 93% of collected levies (GH₵8.07 billion) were deposited into designated ESLA accounts a recurring issue that has hampered effective disbursement. Of this amount, just 75% was utilized, mirroring 2023’s efficiency levels and raising questions about the mechanism’s operational effectiveness.
Originally projected at GH₵9.59 billion, the ESLA target was revised downward to GH₵9.23 billion during the Mid-Year Budget Review, reflecting adjustments to non-oil GDP expectations. The shortfall compounds existing pressures in an energy sector already grappling with debt and inefficiencies.
2024 also saw the conclusion of the ESLA Bond Programme, including the dissolution of E.S.L.A. PLC, the special-purpose vehicle that had securitized levy inflows. Its wind-down marks a significant shift in how Ghana finances energy sector obligations, with potential implications for future debt management.
Finance Minister Dr. Cassiel Ato Forson described the levy performance as symptomatic of deeper systemic issues. “These inefficiencies threaten broader macroeconomic stability,” he warned, calling for stricter enforcement and policy discipline to optimize ESLA’s role in energy security.
As Ghana balances energy transition goals with fiscal consolidation, the levy’s performance will serve as a key indicator of reform progress. The coming years will determine whether ESLA can evolve from a struggling revenue tool into a sustainable pillar of energy financing.
