IMF Supports 225% ECG Tariff Adjustment to Help Address Inefficiencies in Power Sector
The International Monetary Fund (IMF) has underscored the importance of electricity tariff adjustments in Ghana, stressing that reforms must be directed at addressing inefficiencies in the sector, attracting critical investment, and preventing the build-up of arrears.
Addressing a question posed by NorvanReports during a press briefing on Thursday, September 11, 2025, IMF Communications Director Julie Kozack noted that tariff reforms were essential to strengthen the performance of state-owned enterprises and safeguard fiscal stability.
“It is essential from our perspective that any tariff adjustments in the electricity sector aim to address long-standing inefficiencies in the electricity sector. Importantly, that they support much-needed investment in the electricity sector and that they are aimed at also preventing the accumulation of arrears in the energy sector,” Ms Kozack stated.
She added that the Fund continues to support broader reforms, including private sector participation in the operations of the Electricity Company of Ghana (ECG), as part of a wider effort to enhance efficiency and reduce fiscal risks.
Her remarks come against the backdrop of a controversial 225 percent tariff hike proposed by the ECG for the period 2025–2029. The state power distributor insists that the sharp increase is necessary to avert financial collapse and ensure a sustainable and reliable electricity supply.
Per the company’s proposal to the Public Utilities Regulatory Commission (PURC), the Distribution Service Charge (DSC1) is expected to rise from its current GHp19.0384/kWh to GHp61.8028/kWh.
ECG argues that the upward adjustment will provide the revenue base required to clear outstanding debts to independent power producers, improve operational efficiency, and finance critical infrastructure expansion.
The proposed tariff hike, however, has already sparked debate among businesses and households, who fear the impact of higher electricity costs on production and living standards.
