The Executive Director of the Africa Centre for Energy Policy (ACEP), Benjamin Boakye, has expressed serious concerns about inefficiencies and mismanagement in Ghana’s downstream energy sector.
Speaking on the current challenges plaguing the sector, Mr. Boakye called for comprehensive reforms to improve accountability, optimize tax revenue, and refocus institutions like the Bulk Oil Storage and Transportation Company Limited (BOST) on their core mandates.
“BOST was established to build capital and compete internationally while keeping strategic stocks.
“However, it has shifted focus to commercial operations, which not only competes unfairly with BDCs but also renders them inefficient in global competition.”
Ben Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP)
He noted that, despite the operational challenges faced by BDCs due to currency fluctuations and volatile global fuel markets, these private entities have managed to maintain Ghana’s fuel supply.
However, government interventions such as the “gold for oil” policy have failed to address the systemic inefficiencies that undermine the sector.
The downstream energy sector is reportedly costing Ghanaian taxpayers nearly GHS 8 billion annually, according to Mr. Boakye.
He described the financial burden as a drain on public resources with little to no tangible benefits for citizens.
“These policies derail private sector participation and often serve political interests rather than solving systemic inefficiencies,” he explained.
Mr. Boakye also criticized the lack of policy alignment, arguing that the downstream sector could generate significant tax revenue if managed effectively.
He emphasized the need to ensure that institutions like BOST fulfill their original mandates rather than becoming avenues for inefficiency and financial waste.
The inefficiencies in Ghana’s downstream sector also have far-reaching implications for fuel availability and pricing.
Mr. Boakye cautioned against poorly managed resource allocation, which could exacerbate shortages and create instability in the market.
He urged policymakers to strike a balance between resources allocated for power generation and non-power uses, particularly for critical fuels like diesel.
Mismanagement in this area, he warned, could lead to shortages that would negatively impact businesses and consumers.
Calls for Transparency and Accountability
Mr. Boakye stressed the importance of transparency and accountability in the downstream energy sector.
He urged state institutions to operate efficiently and remain focused on their mandates, emphasizing that poorly managed policies and operations harm not only the sector but also the broader economy.
“If BOST’s purpose is to maintain strategic stocks, and it has failed to do so, then why does it exist?” he questioned.
He also called for the government to prioritize optimizing the sector for tax revenue generation rather than allowing it to serve private or political interests.
In his remarks, Mr. Boakye questioned the continued existence of BOST if it cannot fulfill its strategic mandate.
“There are ways to maintain strategic stocks without government injecting money into the private sector.
“However, political systems with inherent weaknesses and inefficiencies continue to justify the existence of BOST, despite its redundancy.”
Ben Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP)
He argued that better policy design and oversight could maintain strategic reserves without BOST’s intervention, suggesting that its current operations do not justify the financial and logistical resources allocated to it.
ACEP is preparing to release a report that will detail the “mess” in Ghana’s downstream energy sector. The report is expected to shed light on inefficiencies, mismanagement, and policy misalignments that continue to hinder the sector’s potential.
According to Mr. Boakye, the findings in the report will highlight the urgent need for reforms to create a more resilient and sustainable energy sector.
Mr. Boakye emphasized the need to align the downstream energy sector with Ghana’s national development goals.
A well-managed and resilient sector, he said, could support economic growth, improve fuel availability, and reduce costs for businesses and consumers.
The inefficiencies and mismanagement in Ghana’s downstream energy sector represent significant obstacles to achieving a sustainable and efficient energy ecosystem.
As highlighted by ACEP Executive Director Benjamin Boakye, urgent reforms are needed to refocus institutions like BOST, optimize tax revenue, and improve accountability.
A reformed downstream sector has the potential to not only improve fuel availability and pricing but also contribute meaningfully to Ghana’s broader economic development.
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