Deputy Finance Minister-designate, John Kumah, has acknowledged the importance of the Energy Sector Levy Act (ESLA) introduced by Seth Terkper, the former Finance Minister under the previous administration.
According to Mr Kumah, ESLA has been of enormous help to the current administration with regards to dealing with debts in the energy sector.
Speaking in an interview on Accra-based Class FM on Saturday, May 8, 2021, the Finance Minister-designate noted the ESLA had helped the incumbent government raise a lot of revenue to pay down costs in the sector.
“ESLA was obviously a difficult one and the former Finance Minister, Seth Terkper, was the first person in Ghana to address the problem of debts in the sector with the introduction of ESLA [sic],” he stated.
“And ESLA has helped to raise revenue a lot of revenue to settle debts in the sector”, he acknowledged.
According to the former chief executive officer of the National Entrepreneurship and Innovation Programme (NEIP), as of June last year, government had paid a total of Ghs 12 billion in debts settlement under ESLA alone.
“This year alone, [per] the data I checked, we had spent almost GHS2 billion and still continuing the energy sector recovery debt and right now, a number of legacy debts – you remember back in 2017, we used to have TOR debt, BOST debt, GNPC debt, VRA debt, ECG debt and even BDCs; last year, the BDCs made an announcement that all their debts had been cleared”, he averred.
“It is all as a result of this ESLA levy that was introduced”, he noted, adding: “It is true; it is helping and the government of Ghana, I think in 2017, the government also introduced a new vehicle based on this ESLA called ESLA PLC, which raised about GHS10 billion in bonds to be able to help address this take-or-pay contract and I’m happy Hon Seth Terkper said that even they, while they were in office, thought that the take-or-pay was a bad arrangement, so, they had to replace it,” he added.
“So, we must all understand that there’s a problem which has been created and we are all working to resolve it”, Dr Kumah further stated.
Now known as ESLA PLC, the company’s key objective is to resolve the energy sector debts. ESLA PLC among others, is authorised to carry on the following business;
a) issue debt securities backed by receivables collected under the Energy Sector Levies Act, assigned to the Company by the Government of Ghana acting through the Ministry of Finance for the purpose of servicing the debt securities and related expenses;
b) enter into such other arrangements and transactions in relation to the issuance of debt securities as may be necessary or required by the Government of Ghana acting through the Ministry of Finance.