Ghana’s power woes persist despite tariff hikes

Ghana’s utility services continue to face challenges in delivering efficient power supply despite periodic tariff adjustments, according to Mr. Kodzo Yaotse, Policy Lead for Petroleum and Conventional Energy at the Africa Centre for Energy Policy (ACEP).

In an interview with Zed 101.9 FM, Mr. Yaotse explained that while tariffs are periodically adjusted to reflect inflation, exchange rates, and fuel costs, inefficiencies within the power distribution companies are the root cause of the ongoing issues with power supply.

“The PRLC [Public Utilities Regulatory Commission] bases its tariff decisions on a number of factors such as inflation, exchange rates, and fuel prices. If these factors fluctuate within a quarter, a revenue gap forms, which needs to be recovered in the next quarter through tariff adjustments,” Mr. Yaotse stated.

However, despite the upward revision in tariffs, many Ghanaians still face inconsistent power supply and subpar services from utility providers. Mr. Yaotse attributed these issues to the inefficiency of power distribution companies, which have consistently failed to collect adequate revenue from consumers.

“We’re currently seeing only about a 43% collection rate, meaning there is a significant amount of revenue that is not being collected. This impacts the ability of the power sector to invest in improving infrastructure and paying for fuel, which ultimately affects power supply,” he noted.

Mr. Yaotse called on regulatory bodies like the PURC to be stricter with utility providers to ensure they deliver value for the tariffs being charged. He emphasized the need for improved revenue collection, which would inject liquidity into the system and enable investment in the energy sector.

“Increasing tariffs alone will not solve the problem. It’s essential for utilities to become more efficient. If they can improve their collection rates and reduce revenue losses, the impact of macroeconomic factors like exchange rates and inflation on tariffs would be less severe,” he added.

Despite the recent tariff increases, the gap between power sales and revenue collection continues to widen each quarter, placing additional pressure on consumers. Mr. Yaotse advised consumers to demand better service delivery from utility companies and hold regulators accountable for ensuring efficiency in the sector.

“Without consumer activism and pressure on utilities to improve, this will just be a recurring conversation. We must demand accountability and better service delivery,” he urged. The interview highlighted the ongoing challenges within Ghana’s energy sector, particularly the inefficiencies of service providers, and the critical need for reforms to improve power supply and consumer satisfaction.