A fresh increase in electricity tariffs announced by the Public Utilities Regulatory Commission (PURC) has triggered sharp criticism from policy think tank IMANI Africa, which argues that the latest adjustment is not supported by prevailing economic indicators and warns that Ghanaians could face even greater financial burdens if critical reforms are not undertaken before the planned private management of the Electricity Company of Ghana (ECG).
In a detailed policy commentary released following PURC’s announcement of a 3.49 percent increase in electricity tariffs effective July 1, IMANI questioned the regulator’s justification for the upward adjustment and raised broader concerns about the government’s plans to hand over the management of ECG to a private operator by 2027 under ongoing International Monetary Fund (IMF) supported reforms.
The statement, authored by technology policy analyst and IMANI associate Sitsofe Mensah, argues that while the tariff adjustment is being justified on expectations of future depreciation of the Ghana cedi against the United States dollar, other key economic indicators cited by PURC point in the opposite direction.
According to IMANI, PURC’s own data indicates that domestic inflation has declined to 3.43 percent, while the cost of natural gas, one of the major inputs in electricity generation, has fallen by 1.58 percent.
The think tank therefore believes the rationale behind the tariff increase is difficult to reconcile with the broader economic data.
“The math simply isn’t mathing,” the statement declared, adding that IMANI intends to formally challenge PURC’s decision.
However, the organisation believes the latest tariff adjustment is only a small part of a much larger problem confronting Ghana’s electricity sector.
It argues that the government’s plan to introduce private sector management at ECG should not be presented as a silver bullet capable of resolving years of operational inefficiencies unless deeper structural weaknesses are first addressed.
According to IMANI, simply changing who manages ECG will not automatically fix longstanding problems that continue to undermine the financial sustainability of the country’s electricity distribution system.
The think tank identified four major concerns which it believes government must answer before proceeding with the proposed management arrangement.
The first centres on electricity losses within ECG’s distribution network.
IMANI notes that electricity utilities around the world typically operate with total system losses of about eight percent, covering both unavoidable technical losses and limited commercial losses.
By contrast, it argues that PURC currently permits ECG to pass on losses equivalent to 21.5 percent of the electricity it purchases directly onto consumers through tariff calculations.
According to the organisation, this means ordinary Ghanaians continue paying for electricity that never reaches paying customers.
The statement questions whether any future private manager would immediately be required to reduce losses to internationally accepted standards or whether consumers would continue financing what it describes as excessive inefficiencies while guaranteeing profits for a private operator.
Its second concern relates to the tariff increase introduced earlier this year.
IMANI recalled that in January 2026 consumers absorbed a 9.86 percent tariff adjustment after being informed that the additional revenue would finance investments in transformers and improvements to the national electricity grid.
If consumers are already paying upfront for network upgrades, the organisation argues, they should begin seeing corresponding reductions in the technical and commercial loss charges embedded in electricity tariffs.
Instead, IMANI says consumers appear to be paying both for the infrastructure improvements and for the inefficiencies those improvements are intended to eliminate.
“We are paying for the cure, but still being billed for the sickness,” the statement argued.
The think tank also raised concerns over the Energy Sector Levy introduced on petroleum products.
It noted that government imposed the GH¢1 levy on every litre of petrol and diesel largely to help settle legacy debts accumulated within the energy sector, particularly obligations owed to Independent Power Producers (IPPs).
According to IMANI, if ECG eventually comes under private management, the new operator’s responsibility will be to run the business profitably going forward rather than assume responsibility for historical debts accumulated by previous administrations.
The organisation therefore questioned whether consumers would effectively end up paying twice, first through electricity tariffs designed to sustain the private operator, and again through the fuel levy that continues servicing legacy debts.
Perhaps the strongest concern raised by IMANI relates to government institutions themselves.
The think tank argued that one of ECG’s biggest financial challenges is not simply electricity theft or illegal connections in residential communities, but the persistent failure of government ministries, departments, agencies and politically connected institutions to settle their electricity bills on time.
According to the statement, meaningful reform requires strict commercial discipline across every category of customer.
It questioned whether government would permit a private operator to disconnect defaulting state institutions if they fail to honour their financial obligations, particularly when ECG itself has often struggled to enforce payment against public institutions because of political interference.
The organisation believes the answer to that question will largely determine whether private sector participation succeeds or merely replicates the existing challenges under a different management structure.
“If the government doesn’t have the political spine to enforce commercial discipline on its own agencies, bringing in a private manager is just hiring a very expensive middleman to manage the exact same mess,” the statement said.
The intervention adds another dimension to the growing national debate surrounding electricity pricing, energy sector reforms and the future of ECG.
For years, Ghana’s power distribution company has struggled with mounting debts, high distribution losses, revenue collection challenges and ageing infrastructure, all of which have placed considerable pressure on electricity tariffs.
Government has repeatedly argued that improving operational efficiency and attracting greater private sector expertise are essential to restoring financial stability within the energy sector.
However, IMANI insists that privatisation or private management, on its own, cannot resolve problems rooted in weak governance, political interference and inconsistent enforcement of commercial rules.
According to the think tank, any meaningful reform must first address the structural causes of ECG’s financial difficulties rather than merely changing who sits behind the management desk.
As discussions over the future of Ghana’s electricity sector intensify, IMANI is urging policymakers to provide clear answers before any management transition takes place. The organisation argues that consumers have already borne significant financial sacrifices through repeated tariff adjustments and new energy taxes, and should not be asked to shoulder additional costs unless government can demonstrate that fundamental reforms will accompany any future private sector involvement.
For millions of electricity consumers already grappling with rising living costs, the central question raised by the think tank remains difficult to ignore. Will the next round of reforms finally reduce the cost of electricity, or will Ghanaians simply find themselves paying twice for the same persistent problems?
