News Guide Africa

Tag: Utilities tariff

  • New utility tariffs to be announced in January – PURC

    New utility tariffs to be announced in January – PURC

    The Public Utilities Regulatory Commission (PURC) has indicated that new utility tariffs will take effect in January next year, following a stakeholder consultation and public hearing to guide the final decision.

    Executive Secretary of PURC, Dr. Shafic Suleman, said the adjustment process is aimed at striking a balance between protecting consumers from excessive charges and enabling utility providers to sustain and improve their operations.

    “Our objective is to ensure that consumers are not overburdened with high tariffs while at the same time allowing utility providers to invest in keeping the lights on,” Dr. Suleman stated.

    He underscored the commission’s commitment to shielding vulnerable groups, noting that the lifeline tariff system remains in place to guarantee affordable access to essential utilities for the poorest households.

    Dr. Suleman assured that views gathered during the stakeholder consultations and public hearings would play a significant role in shaping the final tariff levels.

    He acknowledged the challenges of regulating the sector, pointing out that the task requires balancing the needs of consumers with the financial sustainability of service providers.

    “Keeping the lights on is complex and expensive,” he said, “but we are working to ensure that investments in utility infrastructure can continue without passing undue hardship onto consumers.”

    This follows the Commission’s nationwide public hearing on proposals submitted by utility companies as part of the 2025-2029 Multi-Year Tariff Review. The Commission met with the Trade Union Congress (TUC) to discuss the proposals and gather feedback from stakeholders.

    PURC Seeks to Promote Transparency and Accountability

    The Executive Secretary of PURC, Dr. Shafic Suleman, stated that the public hearings aim to enhance the relationship between utilities and consumers, promote transparency, inclusiveness, and accountability in the tariff-setting process. “The goal of creating this platform is to promote transparency, inclusiveness, and accountability in tariff setting, while ensuring that the Commission’s decisions strike a balance between economic realities and social considerations,” he added.

    TUC’s Role in Shaping Utility Tariffs

    Dr. Shafic acknowledged the crucial role of TUC in defending the interests of workers and households. “The TUC has historically been the vanguard of social justice, defending not only wages and employment but also the purchasing power and dignity of the Ghanaian worker,” he said. “Your perspective ensures that the Commission’s decisions are grounded in real economic and labour conditions.”

    Key Issues Discussed

    The meeting discussed several key issues, including: The impact of tariff adjustments on workers and households. The need for reliable and affordable power and water to support national policy initiatives such as the 24-Hour Economy. The importance of social equity, national stability, and the long-term welfare of the people in utility reforms

    TUC’s Concerns and Recommendations

    The Secretary General of TUC, Mr. Joshua Ansah, urged stakeholders to pay attention to the presentations from utility companies and make useful contributions. He also requested that the Government of Ghana take decisive action to address the pollution of water intake points by illegal miners, which would reduce the cost of operations for Ghana Water Limited and save workers from paying high water tariffs.

    The public hearings, which began on Monday, September 8, 2025, in Accra, have already featured representation from Civil Society Organisations (CSOs) and the media. Utility companies, notably Electricity Company of Ghana (ECG), Enclave Power Company Limited, Volta River Authority (VRA), Northern Electricity Distribution Company Limited (NEDCo), Ghana Grid Company Limited (GRIDCo), Ghana National Gas Company Limited, and Ghana Water Company Limited, took their turn to present and defend their proposals.

    Next Steps

    The public hearings will continue in the coming weeks, with regional engagements to follow. The Commission will consider the feedback and input from stakeholders in its decision-making process.

    The Public Utilities Regulatory Commission (PURC) is the regulatory body responsible for overseeing the electricity, water, and natural gas sectors in Ghana.

     

     

  • IMF, economists back utility tariffs hike amid public outcry

    IMF, economists back utility tariffs hike amid public outcry

    As Ghanaians are up in arms against proposals by the utility companies for steep upwards tariff adjustments, some stakeholders of the Ghanaian economy are all out for the hikes, although not being specific with the rate.

    The International Monetary Fund has described the proposal as vital to fixing inefficiencies and attracting investment into the country’s electricity sector.

    At a media event in Washington, D.C., last week, the IMF’s Director of Communications, Julie Kozack, said the Fund’s backing is linked to the broader goal of restoring financial stability in the energy sector.

    “What is essential from our perspective is that any tariff adjustments in the electricity sector aim to address longstanding inefficiencies in the sector, importantly, that they support much-needed investment in the electricity sector, and also that they are aimed at preventing the accumulation of arrears in the energy sector,” she explained, adding that, the IMF’s support goes beyond tariff reviews.

    “More generally we are continuing to support broader sector reforms including private sector participation in ECG operations,” she noted.

    According to her, these reforms are part of ongoing efforts to improve the performance of state-owned enterprises and reduce fiscal risks.

    The Public Utilities Regulatory Commission (PURC) is considering new tariff adjustments, expected to take effect from October 1, 2025. Currently, the Commission is engaging stakeholders on proposals submitted by utility providers, including the Electricity Company of Ghana (ECG), which has requested for about 225% increase in tariffs.

    ECG has requested a hike in its Distribution Service Charge (DSC1) from the current GHp19.0875/kWh to an average of GHp61.8028/kWh, citing inflation, foreign exchange volatility, interest rates, and the need to recover investment costs as drivers for the proposed adjustment. Also, Ghana Water Company Limited (GWCL) has requested for a 281% increase in its water tariff, proposing a jump from GH¢5.28 per cubic metre to GH¢20.09 per cubic metre

    The proposed electricity tariff review is intended to help restructure the energy sector’s growing debt burden and strengthen the long-term sustainability of electricity supply.

    The proposal has drawn criticism from consumers, who argue that the increases are disproportionate to the quality of service delivered.

    Meanwhile, a Board Member of PURC and Presidential Staffer, Nana Yaa Jantuah, has assured Ghanaians that it will safeguard consumer interests as utility providers push for substantial tariff increases.

    “The cost of energy is expensive, so we need to keep the lights on. We must ensure that energy is available for industry, for the economy to run, and to guarantee consumer comfort.

    “The quality of service is key, but we also have a very difficult job—to ensure improved service delivery while keeping the utilities financially viable. Ultimately, we must find a win-win situation,” she said.

    However, Energy Analyst, Kwesi Yamoah Abaidoo, has strongly criticised the proposals, arguing that ECG has failed to tackle inefficiencies such as technical and commercial losses, poor governance, and wastage, which he said continue to drain the company’s resources.

    “Requesting such an increment will yield no results until these inefficiencies are addressed. ECG seems to take pleasure in increasing the burden of Ghanaians instead of fixing its structural problems,” he said.

    While acknowledging recent improvements in power stability, the analyst insisted that repeated tariff hikes were unfair to ordinary citizens. He recalled that the Public Utilities Regulatory Commission (PURC) only approved a 14.75 per cent tariff increase in July, yet consumers are now being asked to brace for another sharp adjustment.

    Mr Abaidoo also noted that gains from recent currency appreciation, which should have cushioned consumers through reduced tariffs, were not passed on.

    “The average Ghanaian hasn’t seen any increase in disposable income. Salaries remain stagnant, yet electricity costs keep rising. This proposal risks pushing low-income households, especially those in rural areas, off the national grid,” he warned.

    He further cautioned that such steep hikes would also hurt businesses, forcing them to pass costs onto consumers, thereby worsening economic hardships.

    An Energy Economist, Ebenezer Baiden, has explained why the ECG is requesting a 225% tariff increase, arguing that its current 11% share of tariffs is far too low to sustain operations.

    Mr Baiden, in a radio interview said the request falls under the multi-year tariff review cycle.

    “So we normally go through minor adjustments, which we call automatic adjustments. There are parameters to consider. So, for example, it looks at some macroeconomic adjustment variables and then also it looks at variation in dispatch and then the varied fuel used,” he explained.

    He added that Ghana is currently at the stage of a major review.

    “Now we are looking at a multi-year order, which is a major tariff review. Normally, it takes five years for that to happen. So, we have been working through this from 2022 to 2025, and the multi-year order ends.

    “Then 2026 to 2030, another multi-year order begins. Now this looks at structural issues, works that may have happened within the period, how we finance them, and then how to recover those costs.”

    Mr Baiden said that ECG has had to pre-finance projects before seeking tariff adjustments, leaving the company heavily indebted.

    “Currently, the ECG tariff structure is such that, or the PURC tariff structure is such that, you have to pre-finance projects, bring them into service before you can now ask for a tariff adjustment. They should visibly see that whatever you invested in is working, and customers are benefiting from it, before you can apply for that.

    “So we’ve gone through some facilities, supplier credits, taking loans from banks and all that. Today, our books are all in the red. And it is to say that all those works that we committed to across the ECG operational areas, commencing from Techiman to down south, which control over 75% of electricity consumption in Ghana, we’ve been able to expand networks. We’ve been able to do network intensifications where we have low voltages. We’ve injected transformers and all that. Today, generally, the supply quality is better than before.”

    He said it was now necessary for ECG to recover the investments made.

    “Now it’s time we’ve gone to the PURC to say that these are the costs that we have incurred, let’s sit and discuss. But what we have incurred in our books, we need to now pay for it, empower us to now be able to go back and do more.

    “About digitalisation, today you sit in your room and you can now buy credit. You can pay your bills. You can report a fault, and technical men are on their way to your place. You don’t need to come to the district office to queue for electricity.

    “These are some of the interventions that have been done to improve supply services, and based on that, the cost we have incurred with the PURC, it’s time to communicate that to seek customer support and then get that as part of the electricity (tariffs). So this is why we have a proposal before the PURC, and we are asking for a stretch adjustment.”

    Breaking down the numbers, Mr Baiden revealed that ECG currently retains only 11% of total electricity revenue, with about 65–70% going to generation and another portion to the transmission company GRIDCo.

    “Currently, our tariff is 19%. In fact, it dropped in the last quarter review to 17%. Customers are paying 17 pesewas, the total is about 1 cedi 59 pesewas. A bigger chunk of it, about 65 to 70% goes to generation, then transmission, which is GRIDCo, will take a portion of it. Now ECG’s portion is 11% and it is the ECG portion that we are talking about that has to be rebased.

    “Standard utility operation, we have it between 30 to 35%. We are working with 11%. You collect the revenue and you pay all out.”

    Using an illustration, he explained the company’s challenge:

    “If it costs 10 cedis to purchase power from the power producer, and then let’s say GRIDCo adds 1 cedi to it, let’s say ECG adds 2 cedis to it, we have a build-up, total build-up of 13 cedis. And your cost or my price to the customer should be around 13 cedis. Today our number is somewhere around 8 cedis.

    “So what this means is that if, by even looking at paying for power producers only, we go into the red, this is a challenge for us. So that’s how come we are talking about that number, the 61 pesewas,” he explained.

     

    By Adnan Adams Mohammed

  • Tariffs increment: stakeholders challenge PURC amidst economic hardship

    Tariffs increment: stakeholders challenge PURC amidst economic hardship

    Adnan Adams Mohammed

    The Public Utilities Regulatory Commission (PURC) has justified the upwards review of utility tariffs.

    PURC’s justification comes in the midst of stiff opposition from major stakeholders and the citizenry. The Commission, last week announced a 27.15% increase in tariff for electricity and 21.55% increase in water tariff effective September 1, 2022.

    Business owners and ordinary citizens have all agitated against the upward adjustment at the time that economic hardship is biting everyone in the country.  Describing the situation as harsh, the Chief Executive of the Ghana National Chamber of Commerce and Industry (GNCCI) pointed out in an interview that, businesses were expecting moves that will reassure them—not a further increase in their cost of production.

    “If we continue increasing the cost of production for businesses, it will get to a time they will fold up and ask their workers to go home. The unemployment rate will get worse”, Mark Badu-Aboagye worriedly said.

    Mr. Badu-Aboagye argued that with the current situation of Ghana’s macro-economic indicators, government is expected to be sensitive to businesses.

    “There is a likelihood that a lot of businesses are going to run at a loss. Businesses are expecting policies that would rather bring some relief as inflation and interest rates go up. The tariff increment is going to raise the cost of production in the country”, he said.

    Providing some recommendations, Mr. Badu-Aboagye appealed to government to engage businesses regularly to understand the current challenges faced by the private sector.

    Earlier this, the utility companies including the Electricity Company of Ghana and Ghana Water Company Limited proposed an increase in tariffs by 148% and 334% respectively. The PURC had to do a nationwide stakeholders consultation before arriving at the current decision.

    Meanwhile, the Director of Regional Operations at the Public Utilities Regulatory Commission (PURC), Alhaji Abukari Jabaru has explained that, every tariff has a control period and the last control period of the commission had expired.

    “The last tariff had a two-year control period but had expired and because it had expired they [utility companies] were obliged to submit a proposal based on the guidelines that were submitted to them”.

    “Originally they [utility companies] submitted a five-year tariff control proposal but had to go on with the three-year plan,” he said.

    Apparently, the Chamber of Independent Power Producers (IPPs), Distributors and Bulk Consumers have challenged the Public Utilities Regulatory Commission (PURC) to ensure that consumers get value for money from the power consumed, but not pay for the inefficiencies of the Electricity Company of Ghana (ECG).

    The Chief Executive of the Chamber, Elikplim Komla Apertorgbor, in an interview to ascertain his reaction to tariffs increment said, ECG must live up to expectations and settle all its indebtedness to the key stakeholders within the electricity value chain.

    “I will like to challenge the regulator, the PURC to ensure consumers get real value for their money and not pay for ECG’s inefficiencies. Enough of commercial and technical loses, enough of these stories”.

    He mentioned that “let them up their game and provide us the best of service. I must commend PURC again and for the resolve to lower tariffs for the small and medium scale industries. On a first side, it is a great push and support for the local industries to thrive well in the competitive space.

    “In the midst of unimaginable economic conditions, the tariff adjustment has become inevitable especially when the underlying price determinants are out of control. The most important thing is for ECG to make the required revenue and settle the key stakeholders in the electricity supply value chain.

    “It will interest you to know that ECG as of the end of July this year has accumulated up to $908 million to the IPPs alone. So, it is important to make the required revenue to settle this debt”, Mr. Apertorgbor pointed out.

    Consequently, the Minority in Parliament in a statement signed and released last week by Ranking Member on Parliament’s Mines and Energy Committee, John Jinapor, intuited that the increase in utility tariffs by the Public Utilities Regulatory Commission (PURC) will only exacerbate the current high cost of living.

    According to Mr. Jinapor, the increase will also “worsen the plight of the already impoverished Ghanaian.”

    “Prior to the electricity tariff increments, petroleum products at the pumps have witnessed a colossal increment of about 100%. So far the Energy Debt Recovery Levy has seen an increase of 20%; the Price Stabilization and Recovery Levy is up by 40%.

    “The Unified Petroleum Pricing Formula has been increased by 164%, whilst the BOST margin has been increased from three pesewas to nine pesewas representing a 200% increase. As if this is not enough, the fuel marking margin levy has also been increased by another 233%.

    This is against the background that the volume of petroleum products consumed has increased by 35% from 4 billion litres to 5.5 billion litres.”

    In this regard, he stated that “We are of the strongest conviction that Government can and must do something to cushion Ghanaians who are going through unimaginable hardships with ever-worsening poverty levels under the Akufo-Addo/Bawumia-led government.”

    Mr Jinapor further clarified that the 27 per cent increase in electricity does not apply to every consumer.

    “A critical look at the tariff structure as announced reveals that all residential consumers who fall between 0-300 kWh bracket have witnessed a price increase from GHp/kWh 65.4161 to GHp/kWh89.0422, representing an increment of almost 34%.

    “It should be noted that the bulk of residential consumers fall within the 0-300 kWh bracket and will therefore be adversely affected by the 34% adjustment,” he stated.

  • Utility tariffs increment: Make your voices heard – Chief of Staff to stakeholders

    Chief of Staff Frema Osei-Opare has said all the stakeholders must make their voices heard in the process of announcing new utility tariffs by the Public Utilities Regulatory Commission (PURC).

    “It is my fervent hope that all stakeholders will engage actively in this review process and make their voices heard so that the final outcome will benefit the generality of all stakeholders,” she at the inauguration of an office complex for the PURC in Koforidua.

    The Head of Public Relations and External Affairs of the PURC said the Commission will also consider the interest of the investor community and the interest of the utility companies before announcing the new tariffs.

    The PURC had earlier noted that this year’s approved tariffs for utility service providers will be announced on July 1, 2022.

    According to the PURC, the tariffs could be increased or decreased.

    Dr Eric Kofi Obutey, the Director of Research at PURC made this known on Accra 100.5 FM’s evening news on Thursday, May 12, 2022.

    He said, for now, the Commission is engaging all the stakeholders to arrive at tariffs that will serve the need of Ghanaians as well as the service providers.

    Dr Obutey mentioned some of the stakeholders as the Parliamentary Select Committee on Mines and Energy; Association of Ghana Industries (AGI), and Ghana Employers Association among others.

    He explained that the stakeholder engagement before the announcement of the approved tariffs is mandated by law.

    Dr Obutey was hopeful that all the engagements will end by June for a decision to be taken by July.

    The Electricity Company of Ghana (ECG) and Ghana Water Company Limited have proposed 148 per cent and 334 per cent hikes, respectively, in tariffs.

  • Tariffs increment: will PURC consider economic hardship or face reality?

    Tariffs increment: will PURC consider economic hardship or face reality?

    Adnan Adams Mohammed

    The Public Utilities Regulatory Commission (PURC) has said this year’s approved tariffs for utility service providers will be announced on July 1, 2022.

    According to the PURC, the tariffs could be increased or decreased.  The Director of Research at PURC, Dr Eric Kofi Obutey, has said,  the Commission is engaging all the stakeholders to arrive at tariffs that will serve the need of Ghanaians as well as the service providers. The stakeholders as the Parliamentary Select Committee on Mines and Energy; Association of Ghana Industries (AGI), and Ghana Employers Association among others.

    The Electricity Company of Ghana (ECG) and Ghana Water Company Limited have proposed 148 per cent and 334 per cent hikes, respectively, in tariffs. This has triggered the anger of Ghanaians who complains that, the economy is already ‘burning the hell’ out of them, including policy analyst.

    Among the analysts who have reacted to the proposals is, Dr. Steve Manteaw. He has described the demand of increase in electricity and water tariffs as justifiable, saying, there is a strong basis for an upward adjustment, despite the inefficiencies of the utility firms. According to him, factors such as inflation and exchange rate losses justify the upward increment.

    “There is a strong basis for an upward adjustment; if you look at inflation rate, if you look at the cedi depreciation and all that. But what the companies haven’t told us is what component is made up of transmission losses and commercial losses. These are categorised us inefficiency cost”, The Executive Director of ISODEC said in an interview last week.

    “PURC has the mandate to ensure that inefficiency cost are not passed onto consumers. Of course to deal with inefficiencies, you need to make investments, but you don’t make investments from tariffs”, Dr. Manteaw expatiated.

    But, a Political Scientist and lecturer at the University of Ghana, Professor Ransford Gyampo, has questioned the proposal.

    Reacting to the proposed in a Facebook post, last week, he said: “You cannot propose an increment in utility bills across the board like that, at this time when the poor has already been hit hard.”

    He, therefore, wants “only article 71 officeholders, who have, but don’t pay, pay for such hikes,” to be made to pay the proposed increase by the utility service providers and “Leave the poor alone!”

    Apparently, a policy Think tank, Consumer Unity and Trust Society (CUTS) International, has backed the push for a review of utility tariffs by the Electricity Company of Ghana and the Ghana Water Company Limited.

    The think tank, however, maintains that there is the need to speedily address the inefficiencies within the system to make the companies sustainable.

    West Africa Regional Director for CUTS International, Appiah – Kusi Adomako, speaking in an interview explained that; “I support the principle that tariffs need to go up to make ECG able to fulfil its mandate. If ECG is deprived of increment, what it means is that ECG may not be able to invest. And we are told that most of the cables and other things are old and need replacement, or we might go back to the dumsor era. Water is also justifiable because the water company buys chemicals. These chemicals are imported into the country. Freight prices have also gone up, exchange rate has also gone up and even the cost of buying those items have also gone up between the last time tariffs were increased. So, we need to allow these firms to be able to get some increment so that the business will be sustainable. When it is sustainable, people will find them attractive to invest in,” he said.

    Furthering his argument, Dr Manteaw noted that, in normal business practices, shareholders are mandated to inject capital into the business with regard to equipment renewal and all the capital investments needed.

    “The shareholders in this case is the republic (government) and therefore we have to finance these major equipment renewal and maintenance activities from our taxes. They must be budgeted for through the budget and then in terms of the daily operations, you can actually finance through the taxes”, he added.

    He said the package given to Aqua Vitens Rand were far more and better conditioned than those given to Ghanaian entities, adding, “I do recall when we went through ECG privatization, we were prepared to do for PDS what we were not prepared to do for our Ghanaian managers”.

    For instance, he pointed out “when PDS took over, they asked that all the debts ECG had at the time were to be re-fenced. So it were not part of the account because those were legacy debts…they were not responsible. But we are not prepared to re-fenced for the old ECG”.

    “Again, a year before PDS took over, we had denied ECG tariff adjustment (upward adjustment). But when PDS took over, we gladly approved upward adjustment for PDS”, he added.

    Furthermore, Dr. Manteaw said “I tend to look at our utility companies sympathetically, a reason being that they really work under severe stress. And the conditions under which they work are not the type that any foreign multinational company will want to work under.”

    “I recall we brought in Aqua Vitens Rand, we improve water distribution in this country and by the time we abrogated – we actually refused to renew that contract – we had the phenomenon known as the Kufuor gallons. When the facility reverted to the Ghanaian manager, the gallons disappeared”, he stressed.

    Subsequently, the Ghana National Chamber of Commerce and Industry (GNCCI) says any adjustment must favour industries.

    According to the GNCCI, further increases, particularly in energy cost, will be detrimental to the private sector.

    The GNCCI notes that the PURC must consider cushioning the business community with a comparatively lower tariff that is reflected in the production capacity of manufacturing and key service sectors.

    Already, businesses are recovering from the impact of the pandemic in addition to rising cost of doing business.

    A statement issued by the GNCCI states that, “Energy is one of the critical cost components of business. While recognizing improvements in the energy situation over the last few years, energy cost to businesses remains too high (comprising up to 30% of cost of operation in some extreme cases). Businesses pay much higher energy in order to subsidize households. Whereas in many other countries, households pay higher energy cost to subsidize industry.”

    “As we move into the integrated African market zone, power tariff component of products will be a defining factor. Ethiopia and Kenya have better tariffs than Ghana; thus, making their products competitive.”

    In the proposal, ECG also wants 7.6% average adjustments between the periods of 2023 to 2026.

    The GWCL argues that while the average tariff per cubic metre in 2019 was 1.27 USD, it was reduced to USD 1.13 as a result of cedi depreciation.

    For the GWCL, the current domestic tariff of GHS3.29 per cubic metre to consumers within 0-5 cubic metres is less than what the poor in rural areas pay, which is about 10 cedis. The water company thus wants a 334% tariff hike.

    Considering the concerns and facing reality of the economic conditions at the a time inflation at reached all time highest in over 18 years to record 23.67 percent: Will the PURC consider the reality and dishonour or cut down the rate of increase being demanded by the utilities service providers, thus, ECG and GWCL; or it will consider the financial distress of the utility companies and give them what is due them to sustain their smooth operation?

    Ghanaians, ECG and GWCL are all now at the mercy of PURC decision to be announced on July 1.