Mahama Defends Controversial GHS1 Fuel Levy as a Tough but Essential Economic Measure.
Mahama justifies unpopular GHS1 fuel levy as “difficult but necessary” economic step
Speaking at Jubilee House on Wednesday, 4 June, during the official presentation of the final report from the 2025 National Economic Dialogue, the President acknowledged public frustration but maintained that leadership demands tough choices in times of crisis.
“This was not a decision we took lightly,” he said. “It is a necessary and justifiable response to the economic realities we face.”
Funds Will Be Ringfenced for Targeted Development
Addressing concerns about transparency, President Mahama clarified that proceeds from the levy will be managed outside the Consolidated Fund. This decision, he said, was to avoid the inefficiencies and delays often associated with mainstream government financing.
According to him, the money will be strictly allocated to key national priorities, including the upgrading of energy infrastructure and the implementation of stabilisation measures to ease inflation and restore fiscal discipline.
“This approach ensures that the funds are protected and directly deployed to where they are most needed,” he explained.
Think Tank Says Levy Will Hurt Vulnerable Groups
The Institute of Economic Research and Public Policy (IERPP) has criticised the new policy, warning that it places an extra burden on citizens already struggling with high costs.
In a policy brief released on Tuesday, IERPP described the fuel levy as regressive—arguing that it affects low- and middle-income households the most, and triggers a ripple effect in the cost of transportation, goods, and services.
The institute urged the government to pursue structural reforms in the energy sector instead of relying on consumption-based taxes.
Political Opposition Rallies Against the Levy
The announcement has also sparked political opposition. The Coalition of Political Parties (COPP) has declared its intention to stage a public demonstration in Kumasi to protest the new levy, calling it excessive and poorly timed.
Henry Nana Boakye, the National Organiser of the New Patriotic Party (NPP), described the policy as a sign of economic mismanagement, stating that the public should not be made to pay for poor planning and weak financial controls.
He added that the protest would be a peaceful but firm expression of public disapproval.
Government Outlines Broader Reforms in Petroleum Sector
In response to mounting criticism, President Mahama announced a broader reform package for the petroleum sector. He said the government was committed to tightening oversight, boosting transparency, and eliminating inefficiencies that have plagued the energy sector for years.
According to the President, the GHS1 levy is only one component of a larger economic strategy. He maintained that while the policy may be unpopular, it represents responsible leadership focused on long-term recovery, not short-term approval.
“Our focus is on sustainability and reform,” he said. “This is about doing what is right for the country, not what is easy or popular.”
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