Scrap premix subsidy and replace it with credit support – CEMSE urges gov't

The Chief Executive Officer of the Centre for Energy and Sustainable Management (CEMSE), Benjamin Nsiah, has called for the scrapping of Ghana’s premix fuel subsidy and its replacement with a productivity-based credit subsidy for fisherfolk.

He argued that the current input subsidy regime does not promote efficient use of resources and continues to put pressure on government revenue.

Speaking to ModernGhana News on the sidelines of a media training organised by the Chamber of Oil Marketing Companies in Accra on Tuesday, September 29, Mr Nsiah said the system also creates room for the subsidised product to be diverted and sold at significantly higher prices, defeating the purpose of the policy.

“So, based on these three factors, I think that government needs to scrap premix. And the last part is also the overpricing of it," he noted.

The Energy Analyst said government could instead provide support based on the productivity and output of fisherfolk.

He said such a system would encourage efficiency while ensuring that public resources are directed towards increasing production in the fishing sector.

According to him, premix fuel is currently subsidised by about GH¢8 per litre, but the product is sometimes sold at about GH¢10 per litre at the pump despite being expected to sell for around GH¢5.

Mr Nsiah proposed that government redirect resources currently used for the premix subsidy towards credit facilities and the expansion of fishing infrastructure.

He said fisherfolk could be supported to acquire better boats and other equipment to increase their catch and reduce Ghana’s reliance on imported fish.

“We could subsidise fisherfolk, but the subsidy must be based on their output or what we call their catch, and we can also support them through certain microfinance resource allocation to these fishermen, setting credit facilities for them to expand their operations," he stated.

He added that a productivity-based subsidy would link government support directly to output and encourage fisherfolk to improve their operations.

According to him, resources currently committed to the premix subsidy could instead be channelled into expanding the fishing fleet and improving production infrastructure to increase domestic fish supply.