The Finance Ministry has been urged in a Finance Committee report to conduct an audit to determine the level of indebtedness among the energy sector State Owned Enterprises (SOEs).
According to the annual Finance Committee report on management of the Energy Sector Levies and Accounts for the year ended 31st December 2018, the Energy Sector SOEs continue to accumulate new debts.
The convoluted nature of indebtedness among participants in the Energy Sector also makes it difficult to determine the actual indebtedness of the sector, the report noted.
The report also noted that the VRA, ECG and NEDCO retained portions of the Public Lighting Levies (PLL) and National Electrification Scheme Levies (NESL), instead of transferring them into the designated accounts.
“The retention was contrary to the law. The Committee recommends that the Minister of Finance should ensure all proceeds from the levies are duly paid into the respective accounts as scheduled,” the report stated.
Furthermore, the Committee noted that in the course of the period under review, the Price Stabilisation and Recovery Levy (PSRL) was withdrawn in order to provide some relief for Ghanaians in the face of escalating petroleum prices at the pumps.
“While the measure might be laudable, the Committee urges the Minister for Finance to follow due process by coming to Parliament to get any section of the law amended, thereby upholding the rule of law. Steps must be taken to reverse this illegality as soon possible,” the report stated.
Chairman of the Finance Committee, Dr. Mark Assibey-Yeboah, in response to a question posed by the Member of Parliament for Yapei Kusawgu, John Jinapor, about why GH₵250m was sitting idle in the ESLA account, said the funds have been used to buy back some of the bonds.
“They are not false accounts; the monies have been utilised to buy back some of the bonds. So, Hon. Jinapor, when you express concerns about amortising these in the fourth, fifth, sixth and seventh year, already we are buying back some of the bonds so the burden of amortisation in those years is not going to be huge.
“As indicated in the report, the ministry is being urged to issue at least a billion cedis worth of new bonds. It is a good thing they are doing, instead of these monies sitting in the account to be used to amortised the bonds in the future, now they are buying back some of the bonds” he said.
Both the Finance and Energy Ministries have been urged to activate the cash waterfall scheme and other prudent measures to address the debt accumulation in the Energy sector.
According to the Finance Committee report on the Annual report on management of the Energy Sector Levies and Accounts for the year ended 31st December 2018, from a total amount of GH₵1.4billion received by ESLA Plc, an amount of GH₵1.1billion was used to pay two coupons held by ESLA bond holders in May and November 2018.
The balance of GH₵326m was transferred into a LOCKBOX Account.
The report also revealed that an amount of GH₵5.4m from the total proceeds realised by the ESLA PLC bond was applied to redeem part of the legacy debt of the Energy Sector. Notwithstanding the payments, substantial portions of the debt remain on the books of SOEs.
The annual report’s purpose is to inform Parliament on the management and use of funds realised from the imposition of levies under Act 899.
For the period 2018, the Act imposed various levies on petroleum products and electricity.
During the period under review, a total amount of 3,455.64million litres of petroleum products and 261.26million kilogrammes of LPG were lifted.
The total amount accrued from levies collection for the period was GH₵3.1billion as against a programmed collection of GH₵3.5billion, resulting in a shortfall in collection of GH₵316m.
The Minority in Parliament suggested that the rising debt is a concern, and if steps are not taken the country could end up in another ‘dumsor’ (load-shedding) era.
Edward Bawa, a member of the Mines and Energy Committee, said the country owes the SOEs as well as the Independent Power Producers (IPPs) close to a billion cedis.