Speaking on JoyNews’ AM Show on Wednesday, 4th June, Dr Donkor explained that the country faces a dual challenge—outstanding debts owed to Independent Power Producers (IPPs) and the inability to recover the full cost of power generation and distribution.

“We have a situation where we have the legacy debt—GH¢3.1 billion as stated—but we are also under-recovering costs. So we have to do two things. The 1 cedi, I believe, will go towards both the under-recovery and wiping off the legacy debt.”

While supporting the fuel levy in principle, the former Minister urged Ghanaians to be realistic about its impact.

“My position on the 1 cedi fuel levy is that as a people, we must first of all accept the fact. We can debate implementation, we can debate timing, we can debate methodology, but the fact is that even using the 3.1 billion dollar legacy debt, it is simplistic to assume that the 1 cedi in two years must eliminate that debt.”

Dr Donkor stressed that under-recovery is a ticking time bomb that continues to undermine the sector’s financial health.

“We have a major issue that we are not tackling, and which I hope the government will be tackling anytime soon. As of today, we are under-recovering costs in the power sector. When you under-recover cost, you are piling up debt.”

He highlighted the financing model of energy projects to reinforce the urgency of consistent payments.

“Remember, project finance is about equity and loans. The norm is that equity may be 30%, and the loan will be 70%. So these IPPs and other players will have to service their loans as well. So the Minister for Finance had to cough up money for them because we owe them so much.”

While endorsing the levy, Dr Donkor demanded greater cost control and operational efficiency within the power sector.

“My expectation is that the government will hit hard on the industry to reduce costs. We have to contain costs, and we also have to drive down inefficiencies. It has to be prompt, while we do the financial engineering to take away the legacy debt.”

He also criticised past mismanagement of energy sector levies, particularly the handling of ESLA by former Finance Minister Ken Ofori-Atta.

“If you look at what Ken Ofori-Atta attempted doing when he collateralised the inflows from ESLA, unfortunately, he did not use all the money received to service the debt. There is evidence that it was also used for other administrative government things. That did not help us.”

“More importantly, steps were not taken to drive up efficiency and drive down cost. For us to recover cost in any business, when you under-recover cost, you will invariably be piling up future debts.”

Dr Donkor further called for internal savings within the petroleum pricing structure to ease the burden on consumers, suggesting a review of the Unified Petroleum Price Margin (UPPM) and related components.

“I am in full support of the 1 cedi, but that will not be enough. We also have to look at the price build-up. Within the price build-up, there must be some savings.”

“Let me put this on record, I believe the UPPM, for example, should go down. There should be some savings out of UPPM because the biggest single operating expense on transportation is fuel.”

“Since fuel prices have come down and GPRTU and other transport organisations have come up with a 15% reduction on the back of reduced fuel prices, the UPPM, which is essentially for transportation—both the UPPF and the Primary Distribution Margin—must also come down.”

He also questioned the relevance of current administrative margins given declining inflation and falling fuel prices.

“Then we also have to look at some administrative margins. Do we still have to maintain that quantum in the light of falling inflation, in the light of falling petroleum prices?”

Even if cost savings are identified, Dr Donkor reminded that parliamentary approval is still constitutionally required.

“If we do that, I believe there can be some savings in the existing price build-up to offset the 1 cedi. But the Finance Ministry, by our constitutional construct—even if the whole 1 cedi was to come from the price build-up—is still obliged to come to Parliament for this.”

Dr Donkor’s comments offer a nuanced perspective on the controversial levy, balancing the need for financial sustainability with accountability and prudent fiscal management in Ghana’s energy sector.

Speaking on JoyNews’ PM Express, Dr Donkor, who doubles as MP for Pru East noted that approximately 70 percent of the power sector’s challenge stems from financial and liquidity constraints.

He, however, highlighted that some technical challenges have exacerbated the situation.

Of particular concern to Dr Donkor, a former Power Minister, was what he termed “desktop piling,” referring to the bureaucratic backlog hindering progress within the sector.

“70 percent of the challenge being experienced in the power sector is financial and liquidity. But there is also the technical challenge. For me, the worst part of the challenge we have is the desktop piling that we are doing,” he said on Monday.

Ghana’s power crisis has been a longstanding issue, marked by recurring blackouts and unreliable electricity supply.

The consequences of the power crisis have been far-reaching, impacting businesses, households, and the overall economy. Industries have been forced to contend with erratic power supply, leading to disruptions in production and increased operational costs.

Households have endured frequent blackouts, affecting daily routines and aggravating living conditions.

Due to these challenges, stakeholders within the energy sector have been under pressure to implement solutions that address the root causes of the crisis.

Touching on the root causes of the crisis, Energy Analyst Kwame Jantuah identified finance, debt burden, equipment inadequacies, maintenance deficiencies, and fuel procurement as contributory factors.

He noted that while these issues are well-known to stakeholders within the sector, the lack of transparency in communicating them to the public has hindered progress towards viable solutions.

“Are you trying to tell me that the relevant stakeholders in the power sector don’t know this? They do, but it seems it is we the consumers who don’t know.

“And it is because we are not being told the truth. If we were told when this power crisis started what we are being told today, wouldn’t we have probably solved it by now?” he quizzed.

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According to the MP, Aisha Huang did not work alone but had people mining illegally with her. These people, he said, also need to face the law.

“She had accomplices either in officialdom or the boys on the streets. What has happened to them? So we should not be seen to be only targeting foreigners. We should deal with all those who were involved in that crime,” Dr Donkor said.

“If we do that, no country can come and say, why are you jailing our citizens? Because your citizens were part of a syndicate,” he added.

He explained that all the political bigwigs who have been involved in galamsey and their accomplices must also face the law to serve as a deterrent and aid in the fight against illegal mining.

On Monday, December 4, an Accra High Court convicted Aisha Huang of mining offences. The ‘galamsey queen’ was sentenced to 4 and a half years in prison in addition to a fine of GH₵48,000.

The Chinese national, also known as En Huang, was standing trial for undertaking a mining operation without a licence, facilitating the participation of persons engaged in mining operations, the illegal employment of foreigners and entering Ghana while prohibited from re-entry.

However, her sentence has been met with dissatisfaction from stakeholders and a section of the general public.

To some, the punishment is undeserving, considering the extent of damage the ‘galamsey’ queen’s operations did to the country’s vegetation cover.

A Deputy Attorney General, Alfred Tuah-Yeboah, clarifying the reasons behind the relatively lenient prison term and fine, said that Aisha Huang was prosecuted for her involvement in illegal mining operations between 2015 and 2017, by which time the amended law had not been passed.

The Deputy Attorney General on Tuesday emphasised that there was no evidence of her engagement in illegal mining after her return to Ghana in 2022, following her initial deportation in 2018.

He noted that since the Chinese national committed the crimes under the old law, the judge adhered to the maximum punishment stipulated by the previous legislation.

“If you have a new law that has reduced the punishment under the old law, use it. But if the old law is lesser than the new law, use the old law; that is the law,” Tuah-Yeboah explained.

But speaking on Newsfile, Dr Donkor said he understood the calls for harsher punishments when it comes to galamsey cases; explaining that “in 2015, the level of galamsey and the damage of galamsey is not what it is today. And therefore it is only right that having seen the increasing level of galamsey and destruction of galamsey, we review our laws.”

Meanwhile, following the concerns, the AG, Godfred Dame issued a statement on Tuesday, December 5, declaring his intention to appeal the ruling to demand stiffer sanctions.

He concurred with critics who argued that the four-and-a-half-year prison term and GH₵48,000 fine handed to the Chinese national did not align with the gravity of her actions under Act 995.

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The Pru East MP’s comment follows a viral video in which some staff of the Ministry of Finance were seen in a supposed praise and worship session to welcome the Finance Minister after the 2024 budget presentation in Parliament.

This action has infuriated the legislator who described the civil servants’ action as ‘unfortunate’.

Speaking in an interview on Joy FM’s Midday news, Dr. Donkor said the staff must be called to order.

“I call on the Head of the Civil Service to stamp out this behaviour. The Chief Director of the Ministry of Finance must issue a stern warning to such civil servants,” he requested.

According to him, it is inappropriate for civil servants to “adopt partisan positions contrary to their oath of service.”

He added, “Indeed, every civil servant swears an oath and encompassed in the oath is political neutrality so when you have civil servants being reduced to cheerleaders, it is most unfortunate.”

Dr. Donkor said that when civil servants tow this line, “they make it extremely impossible for any incoming government to work with them.”

This, he explained is the reason why since the colonial days, the cardinal principle of civil servants has been neutrality.

“We must not countenance this. This partisanship displayed by paid civil servants goes against the state.”

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ECG in the past few days had technical challenges affecting smooth service provision to prepaid customers in some operational areas of the country.

Some ECG customers could not top up electric power credit on prepaid metres for the past few days.

However, speaking on the Morning Starr Dr Donkor advised the government to have a vigorous Information Technology (IT) system that can curb losses in the system and resist cybercrime.

According to him, there is a global trend of cybercrime, therefore, the government must improve its system “so that you will not be held hostage by cybercriminals either within or without.

“I wouldn’t say that we were made to pay a ransom but I don’t rule that out. It is a global trend and so you can’t rule that out. Banks elsewhere have had their IT system hijacked and they’ve been forced to pay ransom in other jurisdictions. Nothing makes us exceptional,” the lawmaker added.

He said there are close to 30 percent losses even before the ECG sells, adding that it is only technology that will minimize losses, especially the commercial losses.

Meanwhile, the Management of ECG in a release dated October 1, 2022 stated that the issues of the third part vending have been resolved.