The Ghanaian government has announced a hike in electricity and water tariffs, effective July 1, 2024. The move, aimed at addressing the country’s economic challenges, will see consumers paying more for these essential services. For many Ghanaians, the news comes as a blow.
The Public Utilities Regulatory Commission (PURC) has approved the tariff increases, citing the need to ensure the viability of the utility companies.
In a statement signed by its Executive Secretary, Dr. Ishmael Ackah, dated Friday, May 31, the Commission stated that it decided to recover GHS5.90 billion of the GHS6.81 billion required for the second quarter.
“Revenue Requirement for the Electricity Supply Industry (ESI) Total revenue requirement for the first quarter of 2024, amounted to GH₵5.67 billion. In the second quarter, the revenue requirement is projected to be GH₵6.81 billion. This will result in an increase of GH₵1.14B over the first quarter revenue requirement. The Commission, however, decided to recover GH₵5.90 billion of the GH₵6.81 billion required for the second quarter.
“This decision was taken by the Commission taking into consideration the revenue collection performance of the sector since continuous increases in tariffs have not yielded the corresponding increase in revenue collection by the utilities to cover sector expenditure. In addition, the Commission considered the negative effect of passing on the entire revenue required in one tranche on customers. Thus, the difference of GH₵906.21 million, will be recovered in subsequent quarters.”
PURC added that the Revenue requirement for the second quarter of 2024 amounted to GH₵670.18 million, stressing that an additional GH₵34.33 million needs to be recovered in the second quarter of 2024.
“Revenue Requirement for the Urban Water Supply Industry (UWSI). Total revenue requirement for the water sector for the first quarter of 2024, amounted to GH₵635.86 million. Revenue requirement for the second quarter of 2024 amounted to GHS670.18 million. An additional GH₵34.33 million needs to be recovered in the second quarter of 2024. The water tariff has been adjusted upwards by 5.16%,” PURC said.
Adding that, residential electricity consumers will see an upward adjustment of 5.84% in rates.there will be 3.45% increase in electricity tariffs for lifeline consumers (0-30kWh); 5.84% increase for all other residential consumers who are not part of the lifeline category bracket (31 kWh and above) as well as the non-residential category,” the PURC said.
However the industrial category “will experience an increase in electricity tariffs of 4.92%.”For water, Ghanaians will see “an increase of 5.16% for all customer classes for the period under review.
The May 31 statement added that tariffs for lifeline consumers will see a 3.45% increase.
While the government has promised to mitigate the impact on low-income households, many are skeptical.
As the July 1st deadline approaches, Ghanaians are bracing themselves for the impact. Some are considering reducing their energy consumption, while others are exploring alternative sources of power.
For now, the government remains adamant that the tariff hikes are necessary for the country’s economic growth. But for many Ghanaians, the extra burden is a harsh reality they can ill afford.
Ruth Abla ADJORLOLO
