By Isaac Kwegyir Essel, MSc (Oil & Gas Accounting, RGU–Scotland), Member, Energy Institute (UK), Engineers Australia
Electricity is the lifeblood of Ghana’s economy, powering homes, schools, hospitals, and industries. Yet for many Ghanaians, the cost of power has become unbearable. Rising tariffs, unstable fuel prices, inefficiencies in the system, and legacy debts have combined to make electricity among the most expensive in West Africa.
To ensure energy affordability and stability, Ghana needs urgent, practical reforms that balance the needs of citizens with the sustainability of the power sector.
- Cut Inefficiencies and Power Losses
Electricity losses — from technical faults, outdated transformers, and illegal connections — cost the nation millions of cedis annually. The Electricity Company of Ghana (ECG) and other distributors must upgrade infrastructure, expand prepaid metering, and deploy smart systems to track and prevent energy theft. Reducing system losses by even 5% could significantly lower generation costs passed on to consumers.
- Renegotiate Expensive Power Deals and Clear Sector Debts
Ghana’s high generation cost is driven by expensive Power Purchase Agreements (PPAs) and debts owed to Independent Power Producers (IPPs). The government should renegotiate these contracts transparently and restructure energy sector debts to ease financial pressure. This will stabilise the sector and prevent tariffs from rising further.
- Invest in Cheaper Local and Renewable Energy
Dependence on imported fuels makes Ghana vulnerable to global price shocks. By expanding solar, wind, and domestic natural gas projects, the country can lower fuel costs and achieve cleaner, more reliable power. Rooftop solar systems, supported by net metering policies, can empower citizens and small businesses to generate part of their own electricity.
- Reform Tariffs and Protect the Vulnerable
Tariff reforms should prioritise affordability for low-income households through lifeline tariffs — ensuring basic electricity access at minimal cost. Levies and taxes that inflate bills must be reviewed and rationalised. Targeted subsidies should support the poorest, not be spread thinly across all consumers.
- Promote Energy Efficiency and Wise Use
Energy conservation is the cheapest way to reduce bills. A national campaign encouraging efficient appliances, LED lighting, and smart energy habits can cut household costs significantly. Industries should be supported to audit energy use, reduce wastage, and pass on savings to consumers.
- Strengthen Transparency and Accountability
Public confidence in the energy sector depends on accountability. Regulatory bodies such as the PURC must ensure fair tariff reviews, while ECG, VRA, and GRIDCo should publish transparent financial and operational data. Every cedi paid by citizens should be traceable and justifiable.
- Encourage Local Production and Innovation
Ghana can reduce costs by promoting local manufacturing of solar panels, transformers, and meters. Community-based mini-grids and cooperative energy systems can also provide affordable and reliable electricity in off-grid areas.
- Comparative Insight: Ghana vs Australia
A useful comparison helps reveal how costly electricity truly is for the average Ghanaian.
In Australia, households typically pay between AUD 0.20–0.40 per kilowatt-hour (about USD 0.12–0.25) depending on the state. In Ghana, the average household tariff is about GHS 1.82 per kilowatt-hour (USD 0.14–0.15) — surprisingly close in dollar terms. However, the difference in income levels and purchasing power is stark.
An Australian household earning an average monthly income of over USD 4,000 spends less than 3% of its income on electricity. By contrast, a Ghanaian household earning around USD 300–400 monthly can spend up to 15–20% on power.
This means electricity is several times more expensive in Ghana in real economic terms, even though the nominal USD price looks similar.
Conclusion
Making electricity affordable is not just an economic necessity; it is a social responsibility.
If Ghana reduces inefficiencies, harnesses local energy resources, and ensures transparent governance, every Ghanaian can enjoy reliable, affordable power. The pathway to energy affordability lies in shared responsibility between government, utilities, and citizens, working together for a brighter and more equitable energy future.
Author:
Isaac Kwegyir Essel
MSc Oil and Gas Accounting (RGU, Scotland) | Member, Energy Institute (UK) | Engineers Australia
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