Ghanaian electricity consumers may have overpaid an estimated GH¢1.5 billion in the fourth quarter of 2025 due to inflated exchange rate and inflation assumptions used in tariff setting, according to a policy review by the Centre for Environmental Management and Sustainable Energy (CEMSE).
The report argues that current macroeconomic conditions support a double-digit reduction in electricity tariffs — potentially about 11 percent in the first quarter of 2026.
At the centre of the concerns is the methodology adopted by the Public Utilities Regulatory Commission (PURC), which applied a projected exchange rate of GH¢11.9735 to the US dollar for the fourth quarter of 2025. This figure was further adjusted upward to GH¢12.3715 to account for under-recovery claims by utilities.
However, the actual average exchange rate for the period stood at GH¢10.8733 to the dollar, creating what the report described as an over-recovery of GH¢1.1002 per dollar. When applied to total quarterly electricity consumption of 6,459 gigawatt-hours — assuming 60 percent of generation costs are dollar-denominated — CEMSE estimates that consumers paid roughly GH¢1.5 billion in costs utilities did not incur.
The report also identified discrepancies in inflation projections used in tariff calculations. While PURC applied an annual inflation rate of 12.43 percent in its fourth-quarter model, the actual average inflation for the period was 6.6 percent — nearly half the projected figure.
Despite successive tariff increases, revenue performance at the Electricity Company of Ghana (ECG) has remained volatile. ECG recorded about GH¢1.4 billion in revenue in April 2025 before the first round of tariff adjustments. Revenue declined to GH¢1.3 billion in May after a 14.75 percent hike, rose to GH¢1.6 billion in June, but fell again to GH¢1.3 billion in August despite further increases.
CEMSE maintains that with the exchange rate now around GH¢10.99 to the dollar and projected inflation for the first quarter of 2026 at 3.4 percent, failure to implement a significant tariff reduction would undermine the credibility of the quarterly review mechanism.
The group is therefore calling for over-recoveries to be formally recognised and credited to consumers before any new tariff adjustments are introduced. It warned that failure to act could erode public confidence in the regulatory framework while increasing financial pressure on households and businesses.
Ghanaian electricity consumers may have overpaid an estimated GH¢1.5 billion in the fourth quarter of 2025 due to inflated exchange rate and inflation assumptions used in tariff setting, according to a policy review by the Centre for Environmental Management and Sustainable Energy (CEMSE).
The report argues that current macroeconomic conditions support a double-digit reduction in electricity tariffs — potentially about 11 percent in the first quarter of 2026.
At the centre of the concerns is the methodology adopted by the Public Utilities Regulatory Commission (PURC), which applied a projected exchange rate of GH¢11.9735 to the US dollar for the fourth quarter of 2025. This figure was further adjusted upward to GH¢12.3715 to account for under-recovery claims by utilities.
However, the actual average exchange rate for the period stood at GH¢10.8733 to the dollar, creating what the report described as an over-recovery of GH¢1.1002 per dollar. When applied to total quarterly electricity consumption of 6,459 gigawatt-hours — assuming 60 percent of generation costs are dollar-denominated — CEMSE estimates that consumers paid roughly GH¢1.5 billion in costs utilities did not incur.
The report also identified discrepancies in inflation projections used in tariff calculations. While PURC applied an annual inflation rate of 12.43 percent in its fourth-quarter model, the actual average inflation for the period was 6.6 percent — nearly half the projected figure.
Despite successive tariff increases, revenue performance at the Electricity Company of Ghana (ECG) has remained volatile. ECG recorded about GH¢1.4 billion in revenue in April 2025 before the first round of tariff adjustments. Revenue declined to GH¢1.3 billion in May after a 14.75 percent hike, rose to GH¢1.6 billion in June, but fell again to GH¢1.3 billion in August despite further increases.
CEMSE maintains that with the exchange rate now around GH¢10.99 to the dollar and projected inflation for the first quarter of 2026 at 3.4 percent, failure to implement a significant tariff reduction would undermine the credibility of the quarterly review mechanism.
The group is therefore calling for over-recoveries to be formally recognised and credited to consumers before any new tariff adjustments are introduced. It warned that failure to act could erode public confidence in the regulatory framework while increasing financial pressure on households and businesses.
