The Minority in Parliament has outlined a three-point strategy to help the government address Ghana’s growing energy sector debt.
The Caucus is urging the administration of President Mahama to adopt a more structured, sustainable, and stakeholder-driven approach, rather than burdening citizens with what it describes as punitive taxes.
At a press conference in Accra on Monday, the Ranking Member on the Economy and Development Committee, Kojo Oppong Nkrumah, called on government to reconsider its recent introduction of an 8% fuel levy and instead implement more effective long-term reforms.
“If the government is truly committed to solving the energy sector’s financial problems, it must move beyond taxes and address the structural issues at the root of the debt crisis,” Mr. Oppong Nkrumah stated.
Key Proposals from the Minority:
Renegotiation of Power Purchase Agreements (PPAs):
The Minority is calling for the expedited renegotiation of existing PPAs and other energy sector contracts that have contributed to the accumulation of liabilities.
“Many of these contracts, especially the take-or-pay agreements, are unsustainable and are at the core of our energy sector debt,” Mr. Oppong Nkrumah noted.
“The government must finalise renegotiations it claims to have started to reduce unnecessary capacity payments.”
Industry experts estimate Ghana’s energy sector debt exceeds GH¢80 billion, much of it arising from idle capacity payments to independent power producers (IPPs) under contracts signed without corresponding demand.
Accelerating Renewable Energy Adoption:
The Caucus urged government to fast-track Ghana’s transition to renewable energy sources such as solar and wind, which they believe will reduce reliance on imported fuels and cut operational costs.
“We need to dominate our energy mix with renewable solutions,” he stressed.
“This shift will reduce our dependence on fossil fuels and the need to purchase fuel for thermal plants, which is a major driver of the current debt.”
He added that renewable energy is more cost-efficient in the long term and would shield Ghana from global oil price shocks.
Restructuring IPP Financial Arrangements:
The Minority is also advocating for the integration of fuel and capacity charges into PPAs to allow the Public Utilities Regulatory Commission (PURC) to transparently factor justifiable costs into consumer tariffs.
“We propose that government work with IPPs to move these costs into PPAs and then make a case to the PURC for appropriate adjustments to tariffs,” he explained.
“If justified, this provides a more transparent and regulated approach instead of lumping costs onto consumers through indirect taxes like the new fuel levy.”
According to the Minority, this move would improve planning and pricing in the power sector, protect consumers from sudden shocks, and offer predictability for investors and stakeholders.
The Minority’s proposals come amid rising public concern over the recently imposed 8% fuel levy, which adds about GH¢1 per litre at the pump. Civil society groups and transport operators have also called for the immediate withdrawal of the levy.
The Caucus is urging the government to convene an urgent stakeholder forum—including energy sector players, civil society, and consumer groups—to build consensus on practical and less burdensome strategies to address the nation’s long-standing energy challenges.