The Year 2021 was an extraordinary year, as the country journeyed towards recovery from the devastating impacts of the COVID-19 pandemic. As part of measures to mitigate the impact of the pandemic, Government’s medium-term fiscal policy was broadly focused on improving macroeconomic stability through fiscal consolidation, increased revenue mobilisation, and ensuring efficiency and effectiveness of public finances to achieve value for money.
In line with these objectives, two new levies were imposed under the ESLA — the Energy Sector Recovery Levy (ESRL), and the Sanitation and Pollution Levy (SPL).
The ESRL was imposed, following an assessment of the performance of ongoing sector-wide reforms under the Energy Sector Recovery Programme supported by the World Bank, to augment the funding shortfall occasioned by the inability of Electricity Distribution Companies (EDCs) to cover the cost of power supplied by Power Producers and the associated capacity costs. The assessment revealed that the successes achieved in the sector since 2017, which includes the clearance of legacy liabilities under the ESLA, will be eroded if measures were not taken to minimise the huge fiscal burden created by the need to pay invoices for utilised/unutilised capacity submitted by Power Producers from the Budget.
The Sanitation and Pollution Levy was imposed on the other hand, to provide sustainable funding for effective waste management and combat pollution in line with H.E. The Presidents’ vision to make Ghana one of the cleanest countries in Africa as well as contribute towards the achievement of the Sustainable Development Goals (SDG) 3 and 6 — to ensure sustainable sanitation management for all, combat pollution, and protect lives and livelihoods of the most vulnerable population.
Despite the challenges posed by the pandemic, Government remained resilient and, with the support of Ghanaians, continued to utilise the ESLA levies in 2021, in line with the provisions of the Act, to ensure sustainable power supply for Ghanaians, provide funding for public lighting and the extension of electricity to our peri-urban and rural communities, promote a cleaner environment to minimise the incidence of sanitation-related diseases, support road maintenance, mitigate the impact of rising fuel prices at the pumps, as well as support our fisherfolks/fishing communities, and nascent industries through the payment of premix and Residual Fuel Oil (RFO) subsidy.
Let me convey my sincerest appreciation to my colleague Ministers for Energy (past and present), Heads of Energy Sector SOEs, and the ESLA PLC for their immense support over the past six-years of implementation of the ESLA. I also wish to thank the members of the ESLA working group, drawn from MoF, MoEn, GRA, CAGD, NPA, ECG, VRA, NEDCo, Road Fund, and the Energy Commission for supporting the collection, management, utilisation, and reporting of the ESLA.
Finally, to the good people of Ghana, especially civil society groups and the media, I say a very big thank you. Your invaluable support for the ESLA over the years, especially during the Covid-19 pandemic, ensured that we implemented the ESLA, collectively, to guarantee the continuous provision of stable and affordable energy to all.
God Bless us all.