Paul Twum Barimah, Former Member of Parliament for Dormaa East

Former Member of Parliament for Dormaa East, Paul Apraku Twum Barimah, has called for a reduction in electricity tariffs, citing the ongoing stabilization and appreciation of the Ghanaian cedi.

The cedi has recorded significant gains against the U.S. dollar in recent months, prompting calls from stakeholders for a corresponding adjustment in utility tariffs.

Despite this currency strength, the Public Utilities Regulatory Commission (PURC) implemented a 14.75% increase in electricity tariffs effective May 3, 2025, citing factors such as exchange rate fluctuations, inflation, and fuel costs.

Cedi's upward trajectory

As of May 21, 2025, the cedi had strengthened to GH¢12.22 per U.S. dollar, marking an 8.44% year-to-date appreciation from GH¢16.53 in November 2024. This gain is attributed to several factors, including the Bank of Ghana’s $490 million in forex interventions, increased gold reserves, and an improvement in gross international reserves, which stood at $9.4 billion in March 2025, up from $6.2 billion the previous year.

Tariff hike amid currency strength

The PURC’s recent tariff adjustment was based on a weighted average exchange rate of GH¢15.6974 per U.S. dollar, significantly higher than the current rate.

The Commission explained that the increase was necessary to recover 50% of an outstanding revenue shortfall of GH¢976 million from previous quarters in 2024.
Stakeholder Reactions

The Ghana Hotels Association and the Ghana Union of Traders’ Association (GUTA) have both expressed concern over the tariff hikes. The Hotels Association noted that electricity accounts for over 20% of operational costs and warned that the increase could threaten business sustainability.

GUTA, on the other hand, described the PURC’s decision as unjustified and criticized inefficiencies within the utility sector that ultimately burden consumers.

Calls for tariff reassessment

With the cedi’s ongoing appreciation, stakeholders are calling for a reassessment of electricity tariffs to reflect the reduced cost of importing fuel, which is priced in U.S. dollars.

They argue that if currency depreciation is used to justify tariff increases, then currency appreciation should logically result in reductions, providing relief to both consumers and businesses.

Looking ahead

“As the cedi continues its upward trend, there is growing pressure on the PURC to consider these gains in future tariff reviews. Stakeholders advocate for a transparent and responsive pricing mechanism that aligns with economic indicators, ensuring that consumers benefit from favorable market conditions,” Twum Barimah stated.