Since March 2017, when I presented the maiden report on the management of the Energy Sector Levies and Accounts (ESLA), we have kept our promise and complied with Section 6 of the Energy Sector Levies Act, 2015 (Act 899), as amended. In doing so, we have openly discussed the performance of the programme, collection, and utilisation of all the levies and their related accounts as well as the emerging challenges. We have used the lessons to drive reforms, including the amendments of the ESLA Act in 2017, 2019, and 2021.
This report, which is the seventh edition, serves similar functions and enables us to recalibrate our steps towards institutional and structural excellence. Clearly, it coincides with an era of profound interest in public finances.
Within this context, the aggregate performance shows that proactive and collective work is urgently needed. The key highlights of the performance of ESLA for the 2022 fiscal year indicate mixed outturns. Actual Energy Sector Levies collected amounted to GH¢6,703.30 million, revealing 7.9 percent shortfall from the target, although it was 6.5 percent above collections for 2021. Overall, lodgement was 5.7 percent higher than in 2021 but 4.1 percent below total collection in 2022.
It is, however, important to read these outturns against the overlapping challenges of the year 2022. In a state of “permacrises” – ‘an extended period of instability and insecurity’ - the global energy market saw significant upheavals in 2022. The biggest land war in Europe since 1945 occurred in 2022, and with it, the imposition of far-reaching sanctions against Russia the world’s leading natural gas exporter and the second-largest oil exporter and producer.
The resultant surge in food and energy costs fueled inflation and triggered a cost-of-living crises in many countries worldwide, including Ghana. Inflation in Ghana reached 54.1 percent by December 2022 (when it was 13.9 percent in January 2022), while the Cedi experienced a cumulative depreciation of 30 percent by year-end against the US$, after peaking at about 54 percent in November 2022. This is against an average cedi-dollar depreciation of 6.8 percent between 2017-2021. These shocks severely impacted individuals, households, businesses, and Government and largely underpinned the mixed performance from ESLA.
Rising concerns on fiscal and debt sustainability prompted the Government to work assiduously to secure a Staff Level Agreement with the IMF and launch a Domestic Debt Exchange Programme in December 2022. Through these interventions, structural reform of the energy sector is programmed to harness the prospects of ESLA.
The ESLA vision remains, and the commitment is resolute. In fact, ESLA remains a critical part of the journey to fiscal consolidation, debt sustainability, and macroeconomic stability. We will, therefore, continue to pursue innovations and needed reforms to preserve and leverage the potential of ESLA for energy security and economic transformation.
I am most grateful to my colleague Minister for Energy, Heads of Energy Sector SOEs, and E.S.L.A. PLC for their partnership. The admirable work ethic of the ESLA working group, with representation from MoF, MoEn, GRA, CAGD, NPA, ECG, VRA, NEDCo, Road Fund, and the Energy Commission is deeply cherished. In addition, the watchful and supportive role played by all stakeholders, especially the civil society groups and the media, is duly acknowledged and much appreciated. We are in a partnership of nation building. We cannot relent nor be disempowered by the recent challenges. We must go forward in faith and purposefulness.
I hereby invite you to read the 2022 Report on the Management of the Energy Sector Levies and Accounts and be informed to actively participate in this journey of reforms to eliminate energy poverty and strengthen the energy security of the Republic. This will be an important demonstration of our pledge to the service of Ghana, with all our strength and with all our hearts.
God bless.