Ghanaian electricity consumers may have overpaid an estimated GH¢1.5 billion in the fourth quarter of 2025 due to inflated exchange rate and inflation assumptions in tariff calculations, according to a policy review by the Centre for Environmental Management and Sustainable Energy (CEMSE). The report argues that prevailing economic conditions warrant a double-digit reduction in electricity tariffs — potentially around 11 percent in the first quarter of 2026.
At the heart of the issue is the methodology employed by the Public Utilities Regulatory Commission (PURC), which projected an exchange rate of GH¢11.9735 to the dollar for Q4 2025. This figure was later adjusted to GH¢12.3715 to account for under-recovery claims. However, the actual average exchange rate during the period stood at GH¢10.8733 to the dollar, resulting in what the report describes as an over-recovery of GH¢1.1002 per dollar.
When applied to total quarterly electricity consumption of 6,459 gigawatt-hours — assuming 60 percent of generation costs are dollar-denominated — CEMSE estimates that consumers paid approximately GH¢1.5 billion in costs utilities did not incur. The report also highlights discrepancies in inflation projections. While PURC applied a 12.43 percent annual inflation rate in its Q4 model, actual average inflation for the quarter was 6.6 percent — nearly half the projected figure.
Despite successive tariff increases, revenue performance at the Electricity Company of Ghana (ECG) has remained volatile. ECG recorded about GH¢1.4 billion in revenue in April 2025 before the first round of increases. Revenue declined to GH¢1.3 billion in May after a 14.75 percent hike, rose to GH¢1.6 billion in June, but fell again to GH¢1.3 billion in August despite further upward adjustments.
CEMSE argues that with the exchange rate now around GH¢10.99 to the dollar and projected Q1 2026 inflation at 3.4 percent, failure to implement a significant tariff reduction would undermine the credibility of the quarterly review mechanism.
The group maintains that over-recoveries should be formally recognised and credited to consumers before new tariff adjustments are introduced. It warns that failure to act could erode public confidence in the regulatory framework and increase pressure on households and businesses.
Source: Emmanuel Oppong
