President Akufo-Addo’s intransigence caused dumsor

During the presidency of former president John Dramani Mahama, the government through parliament introduced the Energy Sector Levy Act ESLA 2015 to consolidate existing energy sector levies to promote prudent and efficient utilisation of the proceeds generated from the levies, impose a price stabilisation and recoveries levy, facilitate sustainable long-term investments in the energy sector and to provide for related matters.

The NDC Government established ESLA to consolidate levies collected under the sector, provide funding for power generation and the clearance of legacy debts accumulated within the sector, support road maintenance, provide funding for the regulation, management, development and utilisation of sustainable energy resources under the Energy Commission, provide funding for investments in public lighting and the National Electrification Programme, and subsidise Premix and Residual Fuel Oil.

This was after solving the generational problems with two major plants in the peak of the power crises. In summary, H.E. John Mahama established ESLA to stabilize Ghana's energy sector and mitigate the impact of the crises, and prevent reoccurrence of any energy crises in the future.

The levy, which applied to petroleum products and electricity consumption, was intended to raise funds to settle all outstanding energy-related debts amounting to GH¢14 billion by the close of 2020.

Former President John Dramani Mahama has recently disclosed that, he advised President Akufo-Addo against meddling with the ESLA funds upon assuming office, warning that any diversion from its intended purpose could revive dumsor. President Akufo-Addo did not pay head to this advice, instead, the Akufo-Addo government collateralised the ESLA fund for loan and extended the levy until 2035, hence the current power crises in the country. The Public Utilities Regulatory Commission’s validation reports on the Cash Waterfall Mechanism (CWM) have revealed that the Finance Ministry owes some power generators about GH₵1.28 billion, as Ghana continues to grapple with erratic power supply.

Clearly, this confirms the former president’s position that President Akufo-Addo’s refusal to heed to his advice has rendered the ESLA bankrupt without funds to serve its intended purpose.

It is important to note that, over the course of four years, ESLA generated GHC30 billion until the government decided to collateralise it, and here we are facing energy crises because government cannot pay GHC1.28 billion.

H.E. Mahama is right to attribute the recent energy crises to Akufo-Addo's intransigent and refusal to heed his advice not to touch the ESLA funds.

It is therefore fair to criticise President Akufo-Addo for the current power crises plaguing many parts of the country, because of his intransigent and refusal to heed to the advice of former president John Mahama.

After investing heavily to augment the generational capacity by procuring the AMERI power plant and Karpowership plant, H.E. John Dramani Mahama introduced ESLA as a special purpose vehicle to address any unforeseen financial challenges that may arise, however, the intransigent and incompetence of the Akufo-Addo administration have compelled the president to collateralise the ESLA funds for loans.

ESLA is a Special Purpose Vehicle (SPV) incorporated as a public limited liability company to issue long-term bonds to resolve energy sector debts due to banks and trade creditors. The securities issued are backed by a component of the Energy Sector Levy Act (ESLA) receivables which has been assigned to the company for the settlement of coupons and principal repayments arising under the securities that are issued.

The current power crises are as a result of the mismanagement of the Akufo-Addo administration, they are self-inflicted and unacceptable.