IMF backs Ghana’s planned energy sector tariff overhaul
The International Monetary Fund (IMF) has backed the government’s move to review utility tariffs across Ghana’s power and energy sectors.
This move, according to the Fund, is seen as critical for resolving the nation’s long-standing energy sector challenges.
During a press briefing in Washington D.C., on Thursday, IMF Director of Communications Julie Kozack confirmed the Fund’s full backing for the measure, clarifying that the support is contingent on the increases being used to drive essential reforms.
“The IMF also fully supports broader energy sector reforms, including private sector participation in the operations of the Electricity Company,” Mrs. Kozack stated “This is part of a broader plan to strengthen the performance of state enterprises in Ghana and to reduce fiscal risk.”
The endorsement comes as the Public Utility Regulatory Commission (PURC) is actively engaged in stakeholder consultations over a proposed significant tariff adjustment, slated to take effect from October 1, 2025. This review is a key part of the government’s strategy to tackle the massive debt crippling the energy sector, an objective agreed upon during recent talks with the IMF, and reported by JoyBusiness.
The Electricity Company of Ghana (ECG) itself has proposed an increase of over 200%, though recent commentary suggest the regulator is unlikely to approve the full proposed percentage. This prospect has alarmed some economists, and energy policy researchers, including the Executive Director for the Institute for Energy Policies and Research (IEPR), Kwadwo Nsafoah Poku, and ICEG’s Kwesi Yamoah Abaidoo, who warn of severe consequences for inflation and the cost of living for ordinary Ghanaians.
In assessing Ghana’s progress, the Fund praised country’s performance under its current $3 billion loan programme, noting that “Growth, for instance, continues to outperform expectations,” highlighting improvements in the macroeconomic situation and the government’s commitment to financial management reforms.
The IMF Director of Communications also acknowledged that the new administration is taking “bold measures” to keep the programme on track.
Ghana’s IMF programme
The $3billion 36-month Extended Credit Facility arrangement, approved in May 2023, aims to restore sustainable public finances, expand social protection, and implement structural reforms in key sectors of the country.
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