Emergency Energy Sector Bill
Emergency Ghanain Energy Sector Bill and the Effect on Mining
January 17, 2016
James Balasch – Primary Article Contributor
Matthew Wilson - Team Leader following Mining in Ghana
Keywords: Ghana, Energy Sector Levy (ESL) Bill, oil, gas, price, mining
Money makes the world go round – or in the case of Ghana, maintains political stability and ensures its economy continues on the upward trend. On December 23, 2015 an emergency Energy Sector Levy bill was passed by the Ghanaian parliament along with numerous other levies aimed at the Ghanaian population. Reportedly meant to raise government funds to facilitate long-term investments in Ghana’s energy sector, the bill directly caused an increase of up to 27% in the price of petroleum for Ghanaians on January 4, 2016.
Almost immediately after the introduction of the price rise, outrage has been expressed by Ghanaians from all walks of life. In the political sphere, Ghanaian politicians who opposed the ESL Act have risen up in protest explaining that this bill is economically suicidal, and that the government revenues generated will only be misspent. For the National Democratic Congress, the current political ruling party, this hastily passed legislation risks becoming the popular issue that removes them from power in the coming 2016 election if tensions over the issue continue to escalate.
Protest from the general Ghanaian public has also spilled into Ghana’s mining sector. On January 8th it was reported that a coalition of workers unions of which thousands of Ghanaian miners would fall under, issued a statement. This statement explained that unless the ESL Act of 2015 was withdrawn by January 13, the Ghanaian government would face nationwide workers’ protest. In reply, the government stated it is not planning on reversing the ESL Act. In the short term this will lead to a display of exactly how much power the workers unions hold in Ghana. Along with this is the possibility that if tensions continue to build over this issue, there is a chance that the promised miners’ protest could send the Ghanaian mining industry into a downward spiral.
This situation outlines the precarious position money plays in Ghana by how easily it affects Ghanaian politics and the mining industry. Although the future looks uncertain for both these areas, one thing is for certain: the developments of the coming weeks will hold their futures in the balance.
