The Ministry of Finance 2024 Annual Report on the Management of Energy Sector Levies and Accounts has revealed that collections under the Energy Sector Levies Act (ESLA) fell short of the revised target by GH¢553.92 million, representing a 6% decline.

According to the report, despite it being an improvement over the 11% shortfall recorded in 2023, the 2024 performance continues a pattern of underperformance, with an 8% gap also recorded in 2022.

The ministry attributed the persistent underperformance to prevailing commercial and technical losses within the energy sector, alongside mounting unpaid invoices by consumers of petroleum and electricity.

These systemic issues, the report noted, continue to undermine the effectiveness of the levy.

In the report, an amount of GH¢9.59 billion was initially projected for collection in 2024.

However, this was revised downward to GH¢9.23 billion in the mid-year review of the budget following a downward adjustment of the non-oil nominal GDP, which in turn affected projections for the Road and Energy Fund Levies.

Despite the underperformance relative to the 2024 revised target, collections still marked a 12.1% increase over the 2023 target of GH¢8.23 billion.

Additionally, actual collections for 2024 closed at GH¢8.67 billion, underscoring the scale of the shortfall and the continuing challenges in the efficient collection and management of energy-related levies.

The report further disclosed that actual lodgments into ESLA accounts lagged behind collections by GH¢ 600.78 million, representing a 7% shortfall of the GHS 8.67 billion target.

Nonetheless the amount lodged exceeded that of 2023 by 17.4%.

The Minister of Finance, Dr. Cassiel Ato Forson responding to the findings stated that the ESLA performance figures are indicative of deep-seated challenges in the energy sector, which if unaddressed, pose broader macroeconomic risks.

“The updates on ESLA performance in the 2024 report are only a symptom of widespread malaise in the energy sector and the attendant risks it poses to the entire economy. What I know is that we can work harder and together to enable ESLA to fully achieve its purpose and advance energy security,” he said.

SP/AE

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