• Ghana’s public utilities regulatory commission has approved a 9.86% increase in the electricity tariff and a 15.92% increase in the water tariff, effective January 1, 2026, under its 2026–2030 Multi-Year Tariff Order (MYTO).
• The review is driven by utility investment requirements, macroeconomic variables, especially inflation, exchange rate movements, fuel costs, and the thermal-heavy generation mix.
• The MYTO also incorporates policy reforms, including integrating mini-grids into national tariffs to support universal electricity access.

Ghana’s Public Utilities Regulatory Commission (PURC) conducted a mandatory major Multi-Year Tariff Review for the 2026–2030 period, as required every 3–5 years under the PURC Act, 1997 (Act 538). The previous central review was carried out in 2022 and became due for renewal in 2025. This major cycle is separate from the quarterly tariff adjustments that reflect only short-term operational expenses.

According to the PURC, the increase was necessary to align tariffs with the investment needs of the Volta River Authority (VRA), the Electricity Company of Ghana (ECG), the Ghana Water Company Limited (GWCL) and other utilities. The Commission evaluated each utility's regulated asset base to determine the capital expenditure (CAPEX) required between 2026 and 2030, ensuring providers can maintain infrastructure and improve service reliability.

The review also factored in macroeconomic conditions, notably the Cedi–US Dollar exchange rate and inflation, which shape the cost of power generation and water delivery. The PURC used an exchange rate of GHS 12.0067 per US$ and an inflation benchmark of 8% for the 2026–2030 period, compared to the 2025 baseline of GHS 12.3715 and 12.43% inflation.

Ghana’s generation mix was another critical driver. The share of thermal power will rise from 70.75% in 2025 to 78.79% during the tariff period, while the share of hydro power will fall from 28.80% to 20.90%. Thermal generation relies heavily on natural gas priced through the Weighted Average Cost of Gas (WACOG), which increases from US$7.7134/MMBtu to US$7.8749/MMBtu. The higher thermal dependence raises generation costs, prompting tariff adjustments.

Quarterly adjustments will continue during the tariff period to account for variables beyond utility control, currency stability, inflation, fuel prices and the generation mix. These adjustments aim to preserve the real value of tariffs and maintain the financial viability of service providers.

Public Resistance to the Tariff Hikes

Despite PURC’s justification, many consumers and civil society groups have voiced strong opposition to the increases. According to reports from Ghana Webbers, residents at public hearings argued that higher tariffs would worsen the cost of living, strain small businesses, and disproportionately affect low-income households. Traders and households in Ho, for example, expressed frustration that rising utility bills come at a time when food, transport, and housing costs are already climbing. This resistance highlights the tension between consumer affordability and utilities' financial sustainability.

The 2026–2030 MYTO introduces the integration of mini-grids into the national tariff framework. This reform reflects the PURC’s goal of expanding universal access to electricity, especially in island and lakeside communities. The cost of supplying electricity to these communities at the same rate as traditional grid customers has been factored into the revenue requirement of the Volta River Authority (VRA). The Commission also assessed system losses and collection ratios. Transmission losses increase slightly from 4.10% to 4.40%, while distribution losses rise from 21.40% to 24%, affecting utilities' revenue needs. For water, non-revenue water stands at 43%, a significant cost factor in the new tariffs.

By Cynthia Ebot Takang