Ghanaians must accept realistic electricity and water tariffs now or face heavier economic costs later through debt, taxes, and inflation, according to public policy think tank IMANI Africa, which warns that utility companies are drowning in debt and inefficiency.
IMANI Africa warns that Ghana’s utilities, the Electricity Company of Ghana, Volta River Authority, and Ghana Water Limited, face potential collapse unless tariffs are aligned with real operating costs. “In the end, Ghanaians pay, either directly through the meter or indirectly through taxes and inflation,” the analysis concluded. The Criticality Analysis authored by Lucy Quist outlined critical issues making realistic tariffs imperative.
Ghana Water Limited alone owes over GH₵14.6 billion in loans contracted through the Ministry of Finance, paying about GH₵38.9 million monthly, nearly a quarter of its income, just to service debt. ECG and VRA are similarly saddled with legacy debts from unpaid government bills, uncollected consumer payments, and emergency borrowing. These debts become part of Ghana’s public debt stock, becoming everyone’s burden, according to IMANI.
Operational costs for utilities have skyrocketed, with GWL’s expenses increasing nearly tenfold due to higher prices for water treatment chemicals. VRA now manages rural mini-grids supplying electricity to island communities, vital social projects that earn no profit but cost millions to maintain. At ECG, technical losses, illegal connections, and delayed payments from public institutions continue to drain finances.
IMANI highlighted under-recovery as another critical problem, where utility companies fail to collect enough to cover expenditures. ECG supplies electricity to government agencies that take months to pay, while illegal connections and faulty meters create liquidity traps. This ripple effect forces the Finance Ministry to bail out agencies using taxpayer money.
Ghana’s electricity poles, transformers, and water treatment systems are aging and require billions in capital investment. Without realistic tariffs reflecting true service costs, these projects cannot be financed sustainably. The think tank argues that postponing tariff reviews to ease public anger only defers bills that appear later as poor service, blackouts, or higher taxes.
