The energy sector in Ghana still required GHS 12.9 billion in government financial backing for 2025. This happened even though a new, higher levy was introduced to help pay for energy sector expenses.
The Energy Sector Shortfall and Debt Repayment Levy, or ESLA levy, was increased to generate more money. However, the money collected was not enough to cover all the costs for the energy sector. This means the government had to step in with additional funds from its main account.
This situation highlights ongoing financial pressures within Ghana's energy industry. The country has faced significant challenges related to energy sector debt and operations for some time. The government has tried to fix this by combining several older taxes into the new ESLA levy. In April 2025, Parliament combined levies to make things simpler and collect more money. Later, the government raised the amount of the levy on each litre of fuel.
Finance Minister Dr. Cassiel Ato Forson stated that the extra money from the levy would help reduce energy sector shortfalls and pay off old debts. He also said it would support a more stable supply of electricity for everyone. The ministry's report for 2025 shows that these efforts were not fully successful in covering all the sector's needs. Total money from the levy was GHS 8.66 billion. But the energy sector's payments for 2025 reached GHS 22.67 billion.
Major payments included billions of cedis for gas used to generate power. Large sums also went to pay old debts owed to companies that produce electricity. The government also spent money to restore a guarantee from the World Bank. Funds were also used to buy fuel for electricity generation. The Treasury provided an extra GHS 12.85 billion to help cover these costs. About GHS 5.16 billion of this went to cover current shortfalls. Another GHS 7.69 billion was used to pay off old debts.
These figures are important because they show the problem persists. This is happening at a time when Ghana's electricity company is paying its revenue properly. Also, the value of the Ghanaian cedi has been more stable recently. In the past, a weaker cedi made energy sector costs higher because fuel is often bought in US dollars.
Some of these costs might not happen again. For example, the World Bank guarantee was needed because it had been used before. As more companies follow rules for money collection and old debts are paid down, these costs could go down. The government is also trying to involve private companies in electricity distribution. It is also making operational changes to reduce wasted electricity and money.
The way the government support money was used shows a focus on old problems. Most of the GHS 12.85 billion went to clear past debts. Only a smaller part went to cover current electricity production costs. This suggests the government is trying hard to clean up past financial messes while also paying for today's needs.
The report indicates that the increased levy helped a little. But it did not solve the energy sector's deep-rooted issues. Finance Minister Dr. Cassiel Ato Forson mentioned these deeper problems during his budget speech. These include problems with collecting money, losing electricity through the system, and agreements for buying power that are too expensive.
While the higher tax provided some relief, the Finance Ministry's own data suggest that long-term fixes will need more than just higher taxes. Real solutions require significant structural changes throughout the energy sector's system. The government's 2026 budget projects even higher financing needs, around GHS 15.2 billion for the energy sector. This shows the challenge continues to be large.