Ghana’s premix fuel subsidy under fire

Ghana’s premix fuel subsidy programme, intended to support the fisheries sector and improve the welfare of fishing communities, has come under scrutiny for its unsustainability and ineffectiveness.

According to a recent report, the subsidy programme has cost government approximately GHC1.4 billion from 2014 to 2022, with an annual average cost of GHC163 million.

Projections indicate a further surge to GHC1.074 billion by 2026. Despite this significant expenditure, the programme has failed to improve the welfare of fishing communities, with reports of dwindling catches, income, and hazardous working conditions.

Furthermore, the programme has been plagued by diversion of premix fuel into other markets, overpricing, and hoarding, benefiting cartels and political cronies at the expense of the country.

An industry watcher recommends scrapping the premix fuel subsidy and instituting an output subsidy regime, which would promote efficiency and productivity among fishermen.

‘‘The output-based subsidy helps government to support artisanal fishermen who perform well. Because fishermen know that they will only get credit facilities based on their ability to catch more fish, they will improve their performance in catching more fish. This reduces fish import drastically and promotes welfare of fishermen,’’ according to Executive Director at Centre for Environmental Management and Sustainable Energy (CEMSE), Benjamin Nsiah.

Additionally, Benjamin Nsiah calls for transparency and fraud measures to be implemented to stop abuse and provide access to data.

‘‘Lack of transparency makes it difficult for us to determine the true cost of fuel subsidy in Ghana, therefore automated devices that measure products sent to landing beaches should be installed,’’ he said.

The National Security should investigate and apprehend those selling premix fuel above subsidised prices, deterring exploitation of poor fishermen.

As government’s ability to fund the subsidy hangs in the balance, it remains to be seen whether reforms will be implemented to address these pressing issues.

By Eben Agyekum-Boateng, 3Business

 

The post Ghana’s premix fuel subsidy under fire first appeared on 3News.

Read Full Story