Dr. Kwabena Donkor Defends GH¢1 Fuel Levy as Necessary Lifeline for Ailing Power Sector
ACCRA, June 5, 2025 — Former Power Minister Dr. Kwabena Donkor has mounted a strong defence of the controversial GH¢1 levy on petroleum products, describing it as a necessary adjustment — not a new tax — aimed at rescuing Ghana’s troubled power sector.
Speaking on Joy News’ PM Express on Tuesday, June 4, Dr. Donkor clarified that the increase, approved under the Energy Sector Levy (Amendment) Bill, 2025, is an upward revision of an existing levy, not a fresh tax.
“This is not a new levy… Government is just adding to the quantum,” Dr. Donkor emphasized. “So government has not introduced a new levy.”
Sector in Crisis
He explained that Ghana’s power sector is grappling with severe liquidity constraints due to years of under-recovering costs, which has accumulated billions in debt. As of March 2025, energy sector debt stood at $3.1 billion.
“For any business, if you under-recover cost, you pile up debt,” he warned.
The newly approved levy is expected to generate GH¢5.7 billion annually, aimed at paying down legacy debts and ensuring continued procurement of fuel for thermal power generation.
Call for Structural Reform
Dr. Donkor was clear that revenue alone is not enough. He called for a two-pronged approach to fix the energy sector — combining increased revenue with cost-cutting and efficiency improvements.
“Increasing revenue dedicated to the legacy debt is just one leg. The other leg will have to be to drive down cost in the power sector.”
Without efficiency, he cautioned, debt would only continue to rise.
Public Concerns Valid, But Stability Comes at a Cost
While acknowledging public frustration over higher fuel prices and skepticism over the use of previous energy-related levies like ESLA, Dr. Donkor stressed that stable electricity cannot come without proper funding.
“You want the lights on? Then you have to fix the system. And that means funding it properly.”
He urged Ghanaians to understand the context and urgency of the intervention.
“People need to understand: this GH¢1 isn’t coming out of nowhere. It’s going to a sector that desperately needs liquidity.”
The Bigger Picture
The former minister concluded with a call for long-term thinking and accountability, rather than short-term fixes.
“We’ve had enough short-term patches. Let’s make sure this one is part of a comprehensive fix.”
He stressed that the focus should now shift to ensuring that the power sector is managed with fiscal discipline, transparency, and a sustainable plan for the future.
Please download our HOTDIGITAL ONLINE APP and follow HotDigital Online on our social media platforms to stay updated on our upcoming initiatives.
#HotDigitalHealthAwareness #CommunityHealth #GhanaNursesAssociationUK #HealthMatters #HotDigitalOnline #StrongerTogether
