IMF Backs PURC Tariff Hike, Describes Move as Necessary for SOE Financial Stability
The International Monetary Fund (IMF) has endorsed the recent decision by the Public Utilities Regulatory Commission (PURC) to implement new utility tariff adjustments, citing the move as crucial for the financial sustainability of key State-Owned Enterprises (SOEs).
On Tuesday, April 9, the PURC announced an upward adjustment in utility tariffs, approving a 14.75% increase in electricity tariffs and a 4.02% increase in water tariffs, effective May 2, 2025. The adjustment affects all consumer categories.
Addressing a joint press conference with the Bank of Ghana and the Ministry of Finance, Stephane Roudet, IMF Mission Chief to Ghana, highlighted the importance of the adjustment in helping the Electricity Company of Ghana (ECG) and other SOEs meet their financial obligations.
“The importance of this hike is to support SOEs and also ensure their finances are sustainable,” stated Mr. Roudet. “We are aware of the implications, especially for the vulnerable, but it is necessary to ensure ECG can meet its financial obligations to power producers and guarantee uninterrupted electricity for Ghanaians.”
He further emphasized the need for continuous reforms within the utility sector to prevent the recurrence of legacy debts that have plagued the sector over the years.
In response to growing public concern over the impact of the tariff adjustments on low-income households, Mr. Roudet reiterated the IMF’s commitment to working closely with government to roll out social protection measures aimed at mitigating the burden on vulnerable populations.
“We are very mindful of the needs of the vulnerable in society and want to ensure the government implements policies to protect the poor while improving the conditions of workers across all sectors,” he said.
The PURC has also justified the increases, maintaining that despite recent service challenges—including load shedding and erratic water flow in parts of the country—consumers are still receiving value for money, given the rising cost of power generation and water treatment.
The Commission insists that the adjustments are in line with its Automatic Adjustment Formula (AAF), which takes into account variables such as exchange rate movements, inflation, and fuel prices.
Meanwhile, the Consumer Protection Agency (CPA) has challenged the PURC’s decision, calling for an immediate suspension of the planned tariff hikes and demanding the reconstitution of the Commission’s Technical and External Committees to ensure fair representation of consumer interests.
