Electricity, a lifeline for households and enterprises alike, is becoming a mounting burden for Ghanaian businesses as a new tariff hike looms.
Effective May 2025, electricity tariffs are slated to rise by 14.75% while water tariffs will increase by 4.02%, intensifying pressures that have steadily built since 2022.
In that year, the Public Utilities Regulatory Commission (PURC) approved a significant 27.15% increase in electricity prices along with a 21.55% rise in water tariffs. These adjustments were prompted by soaring fuel prices, persistent inflation, and the financial challenges confronting the Electricity Company of Ghana (ECG).
In the years that followed, businesses experienced further steep rises with the 2023 increases nearly 30% in February and an additional 18% in June exacerbating an environment of escalating operational costs. Although tariff increases in 2024 were more modest averaging around 5% the cumulative effect has left many small and medium-sized enterprises (SMEs) struggling to absorb the cost burden.
For industries that depend heavily on a reliable and affordable power supply, such as manufacturing, retail, and service sectors, the soaring energy expenses are forcing difficult decisions. Companies may be compelled to pass on higher costs to consumers through price hikes, reduce operating hours, or even curtail production when faced with irregular power supply and pervasive outages. Many are also investing in backup generators to bridge the power gap, which only adds another layer of expense.
The PURC has defended the tariff hikes as necessary measures to secure financial stability in a beleaguered power sector. Yet, business leaders remain anxious about the future.
They warn that if the trend of rising tariffs continues, it could stifle competitiveness, force job cuts, and hinder overall economic growth. For SMEs operating on razor-thin margins, even a moderate increase in utility costs could translate into a threat to their survival.
This predicament underlines a broader challenge facing the country: achieving a balance between the need to maintain a financially sustainable power sector and safeguarding the economic viability of local businesses.
As policymakers and the Energy Commission seek long-term solutions to improve power reliability and efficiency, the immediate impact of these tariff hikes is being felt across Ghana’s economy. In an environment where every percentage point of increase counts, the latest figures serve as a stark reminder of the interconnectedness of energy policy and economic health a dynamic that requires careful navigation to protect the livelihoods of businesses and the broader economy alike.
