Civil society organisations are questioning the justification behind the Electricity Company of Ghana’s (ECG) proposal to raise electricity tariffs by 225% for the 2025–2029 regulatory period, warning that the move could deepen energy poverty.
In an interview on Morning Starr with Naa Dedei Tettey on Tuesday, September 9, Benjamin Nsia, Head of the Centre for Environmental Management and Sustainable Energy (CEMSE), said ECG’s arguments are based on selective and incomplete data.
“For example, they mentioned, if you come to ECG, they mentioned depreciation of their currency, which is, yes, true. But the depreciation of their currency, they used end-to-end. They used 2022 and 2024.
And when you use end-to-end analysis, at least you are likely going to get a 74 percent they got. However, within this period, the currency appreciates and depreciates. So you have to look at the cumulative appreciation and depreciation of the currency to be able to make a justified argument with respect to the currency depreciation as a factor of increasing tariffs in future,” he explained.
He also raised concerns about ECG’s management of system losses, “These system losses are huge sums of money. The last time our centre did some simulation or calculation of these system losses, which we’re talking about 4,000 gigawatts of power, we are talking in excess of $600 million.
And $600 million at that time was going to give us almost $1.6 billion that has been a wastage because of our inefficient management or ineffective management of the operations or the system of this particular utility called ECG.”
Nsia added that ECG is overlooking cost-saving measures while pushing for higher tariffs.
ECG, however, insists the sharp increase is necessary to sustain operations. The company is seeking an average 224% rise in the Distribution Service Charge (DSC1)—from the current GHp19.0875/kWh to GHp61.8028/kWh—over the five-year period.
The utility says the proposal is driven by rising inflation, forex volatility, interest rates, and the need to fully recover investment costs.
ECG projects its annual revenue requirements will average GHS 9.1 billion between 2025 and 2029, citing rising operational costs, human resource expenses, capital recovery payments, and taxes.
Source: Starrfm.com.gh
