BY Nadia Ntiamoah
Fresh questions are emerging over the sustainability of the energy sector financing arrangements after official government figures revealed that proceeds from the Energy Sector Shortfall and Debt Repayment Levy, popularly known as Dumsor Levy (D-Levy), were insufficient to fully cover energy sector obligations in 2025.
The development has triggered growing public debate over whether Ghanaians should prepare for additional taxes or adjustments in the upcoming mid-year budget review as government struggles to manage rising energy sector debts and financial shortfalls.
According to details contained in the 2025 Annual Report on the Management of the Energy Sector Support Account, total utilisation from the Energy Sector Support Account in 2025 amounted to GH¢9.82 billion.
Out of that amount, GH¢6.32 billion was used to settle energy sector shortfalls, while GH¢3.51 billion went into repayment of legacy debts in accordance with provisions of the Energy Sector Levies Act, 2025 (Act 1135).
However, the report acknowledged that the magnitude of the outstanding obligations far exceeded the revenue generated through the levy.
As a result, government was compelled to rely heavily on the Treasury Main Account managed by the Controller and Accountant-General’s Department to bridge the financing gap.
The report disclosed that an additional GH¢12.85 billion was drawn from the Treasury Main Account to support payments within the energy sector.
Out of this amount, GH¢5.16 billion was used to settle energy sector shortfalls, while GH¢7.69 billion went into repayment of legacy debts.
In total, government expended GH¢22.67 billion in 2025 on energy sector shortfalls and legacy debt repayments, with more than half of the amount — representing 56.7 percent — coming directly from the Treasury Main Account instead of the Energy Sector Support Account itself.
The figures have intensified concerns among financial analysts and opposition voices about the long-term viability of the D-Levy and the increasing dependence on central government funds to sustain the energy sector.
The debate comes against the backdrop of repeated government assurances that the newly introduced D-Levy would help stabilise the energy sector and gradually address accumulated debt burdens inherited from previous administrations.
During the presentation of the 2025 budget, Finance Minister Cassiel Ato Forson indicated that the Mahama administration inherited an energy sector debt estimated at approximately US$1.4 billion.
Subsequently, the Ministry of Finance announced that substantial payments had been made toward settling those obligations.
However, the latest report now raises fresh constitutional and fiscal accountability questions over whether Parliament approved the use of the Treasury Main Account to finance such large-scale energy debt repayments.
Critics argue that if the D-Levy was specifically introduced to ring-fence resources for energy sector debt payments, then the continued reliance on the national treasury suggests either the levy remains inadequate or the underlying debt burden is far greater than previously communicated.
Some economists have also warned that the increasing pressure on the Treasury Main Account could affect government spending in other critical sectors such as health, education and infrastructure.
The controversy is also likely to fuel public anxiety ahead of the mid-year budget review, with many Ghanaians already expressing concerns over the possibility of new taxes or upward adjustments to existing levies to support government financing needs.
The energy sector debt has remained one of the country’s most persistent economic challenges over the past decade.
Successive governments have struggled to deal with mounting debts owed to independent power producers, fuel suppliers and state energy agencies, largely due to inefficiencies, exchange rate pressures, under-recovery of tariffs and operational losses within the sector.
In previous years, governments introduced various levies under the Energy Sector Levies Act (ESLA) framework as part of efforts to raise dedicated revenue to settle the growing debt burden.
Despite these interventions, the sector continues to face recurring liquidity challenges and debt accumulation.
Financial governance advocates are now calling for greater transparency regarding the utilisation of energy levies, parliamentary oversight of treasury withdrawals and clearer communication to the public on how government intends to sustainably finance the sector without imposing excessive tax burdens on citizens.
Meanwhile, analysts say the upcoming mid-year budget review is expected to provide further clarity on government’s strategy for managing the widening financing gap within the energy sector and whether additional fiscal measures may be introduced to address the situation.
