IMANI Calls for PURC Reform Before ECG Privatisation
Policy think tank IMANI Africa has called for reforms to the Public Utilities Regulatory Commission’s (PURC) electricity loss benchmark ahead of the planned privatisation of the Electricity Company of Ghana (ECG), warning that consumers could end up paying for existing inefficiencies if the current regulatory framework remains unchanged.
In a policy brief, IMANI said PURC’s 21.5 per cent technical and commercial loss benchmark, which is used in determining electricity tariffs, should be reviewed before ECG is transitioned to private management in 2027.
According to the think tank, the benchmark reflects a broader challenge within Ghana’s power sector, an information gap between what electricity utilities know about their operations and what the regulator can independently verify.
IMANI described the situation as an “information asymmetry,” explaining that PURC has limited access to independent, real-time data on the performance of the national electricity grid and therefore relies heavily on information supplied by the very utilities it regulates.
The group argued that this weakens the regulator’s ability to determine whether reported power losses result from unavoidable technical challenges or operational inefficiencies that could be addressed.
It noted that the current tariff regime allows a 21.5 per cent loss level to be factored into electricity pricing, meaning a portion of the cost associated with these losses is ultimately passed on to consumers through their electricity bills.
Comparing Ghana’s benchmark with more efficient electricity systems around the world, IMANI said grid losses in many countries are significantly lower, making Ghana’s higher threshold a concern for consumers.
“By embedding a 21.5 per cent loss tolerance into the tariff structure, the system risks forcing ordinary Ghanaians to underwrite systemic waste,” the think tank stated.
IMANI warned that transferring ECG to private management without first addressing the regulatory shortcomings could result in a situation where a private operator inherits a system in which inefficiencies are already accommodated within the tariff framework.
It argued that if the existing regulatory structure remains unchanged, a private operator may have little incentive to aggressively reduce electricity losses since such costs could continue to be recovered through consumer tariffs.
The think tank therefore maintained that reform efforts should extend beyond changes in ECG’s management structure to include strengthening PURC’s oversight and monitoring capacity.
It recommended that the regulator establish independent data systems, including real-time monitoring technologies, to verify electricity losses, outages and operational performance instead of relying predominantly on reports submitted by utility companies.
Government has indicated that private sector participation in ECG forms part of wider efforts to improve operational efficiency, reduce distribution losses and enhance electricity service delivery.
However, IMANI stressed that the success of the transition will ultimately depend on the strength of the regulatory framework to ensure operators are held accountable while safeguarding the interests of electricity consumers.
