It’s a tough call, but it’s necessary to save our power sector – Mahama defends GH¢1 dumsor levy

President John Dramani Mahama defended the GH¢1 increase in the Energy Sector Recovery Levy (ESLA). He called it a difficult but necessary step to save Ghana’s power sector.

On Tuesday, he stated that Ghana's energy sector debt has reached over US$3.1 billion. An additional US$1.8 billion is needed for fuel to ensure consistent thermal power generation.

Mahama warned that growing energy sector liabilities threaten fiscal stability and economic health.

Parliament passed the Energy Sector Levies Act (Amendment) Bill, 2025, on Monday. This bill allows for the GH¢1 hike in the levy. The revised levy is expected to generate GH¢5.7 billion annually.

The President said these funds will be used strictly for legacy energy debts and fuel procurement. This aims to prevent recurring power outages.

He emphasized that this decision is necessary for national productivity and industrial growth. The revenue from the levy will not go into the consolidated fund. Instead, it will be independently audited with regular public reports for transparency.

In the short term, funds will stabilize electricity supply by purchasing fuel. The government expects more natural gas from Ghana’s ENI Sankofa, Jubilee, and TEN fields soon.

This should help reduce reliance on expensive liquid fuels. Eventually, increased levy resources will pay down accumulated legacy debts in the power sector.

President Mahama assured Ghanaians there would be no immediate fuel price hikes due to recent macroeconomic stability and a stronger cedi.

He acknowledged the burden this decision places on households and businesses but stressed it was not made lightly.

He concluded by reaffirming the government's commitment to reducing inefficiencies in the energy value chain and expanding support for vulnerable populations.