The International Monetary Fund (IMF) has endorsed Ghana’s proposed utility tariff increases, describing them as crucial to fixing inefficiencies and attracting investment into the country’s electricity sector.
Addressing the media in Washington, D.C., on Thursday, September 11, 2025, IMF Director of Communications, Julie Kozack, said the Fund’s support forms part of efforts to restore 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,” Ms. Kozack explained.
She stressed that the IMF’s backing extends beyond tariff hikes, noting: “More generally, we are continuing to support broader sector reform including private sector participation in ECG operations.”
She added that these reforms are part of ongoing efforts to improve the performance of state-owned enterprises and reduce fiscal risks.
Her comments come after the Electricity Company of Ghana (ECG) proposed a 224% increase in the Distribution Service Charge (DSC1) over the 2025–2029 tariff period.
The company defended its request, stating that the adjustment—from GHp19.0875/kWh to an average of GHp61.8028/kWh—is essential to restoring financial stability and ensuring sustainable service delivery.
ECG attributed the proposal to persistent economic pressures, including inflation, exchange rate volatility, rising interest costs, and the need to recover major investment outlays.
According to its five-year financial outlook, the company’s annual revenue requirements will average GHS 9.1 billion, driven by operational expenses, human resource costs, depreciation, capital recovery obligations, and taxes. ECG argued that only a significant tariff overhaul can meet these rising commitments.
Similarly, Ghana Water Limited (GWL) has urged the Public Utilities Regulatory Commission (PURC) to approve a 281% increase in water tariffs, proposing a rise from GH¢5.28 per cubic metre to GH¢20.09 per cubic metre for the 2025–2029 regulatory period.
GWL explained that the sharp hike is necessary to clear its debt overhang and meet growing operational costs, particularly those linked to raw water pollution and foreign exchange pressures affecting the importation of equipment and treatment chemicals.
At a public hearing on the proposal, Michael Klutse, Manager in Charge of Monitoring at GWL, warned that the company cannot continue to deliver reliable water services under current tariff levels.
He noted that without an upward adjustment, sustaining supply and financing infrastructure expansion will be difficult.