Renowned economist, Professor Godfred Alufar Bokpin, has acknowledged the public concerns surrounding the newly introduced GH¢1 fuel levy but maintains that it is a necessary intervention to safeguard Ghana’s economy.
Speaking on Morning Starr with Naa Dedei Tettey, Prof. Bokpin stated that while the levy may not be ideal, Ghana must prepare for difficult but essential decisions in order to achieve long-term stability and growth.
“Let’s bear in mind there are difficult, painful decisions ahead that we have to take if Ghana wants to have a bright future. And if we are not careful and we don’t navigate this transition very well, how do you move from this shock therapy to progressive spending without causing disruption in the economy? Because the stability we have seen is not anchored on structural economic transformation. It would be too much of action to say in the last five months or so we should be talking about economic transformation, which will cause a strengthening of the currency.”
He warned that borrowing to stabilise the energy sector could backfire, especially given Ghana’s current debt levels and the potential impact on the cedi.
Prof. Bokpin noted that while the economy has shown signs of stability, these are not yet rooted in structural transformation.
“Transformation in economics will not take you less than 15 years of doing the right things consistently and the necessary structural reforms that we have to bundle together.
Reforms are more effective if you bundle them together and they reinforce each other. Yes. It is necessary. I estimate that this year we don’t have budgetary allocation to procure fuel. If you go and look at the 2025 budget, we don’t have that. We will just say, okay, let’s go and borrow. We can borrow today because we don’t want to use this level. But when we borrow, who pays ultimately? Ultimately it is repaid at the same tax payers or probably one day a haircut where you may not even get to choose the style of the haircut.”
The GH¢1 fuel levy was introduced through the Energy Sector Levy (Amendment) Bill, 2025, which was passed by Parliament on Tuesday, June 3.
It imposes a GH¢1 tax on every litre of petroleum product — a move that has drawn criticism from the public, transport unions, and the Minority in Parliament.
READ: GPRTU to Meet Over GH¢1 Fuel Levy
However, the government has defended the decision as a critical step to address the energy sector’s legacy debt of about \$3.1 billion and prevent future power crises.
Finance Minister Dr. Cassiel Ato Forson, who presented the bill, assured Ghanaians that the tax would not result in higher fuel prices due to the recent appreciation of the cedi.
He added that the revenue would be used to procure fuel for power generation, helping to minimise power outages and improve grid stability.
Source: Ghana/Starrgm.com.gh/Hamdia Mohammed
