Ghanaian businesses are bracing for yet another financial strain as news of an impending increase in electricity tariffs surfaces, raising fresh concerns across the private sector. For many small and medium enterprises already grappling with inflation, currency depreciation, and high operational costs, this latest hike could be the tipping point.
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Electricity has long been an essential service in Ghana, but in recent years, it has become a growing source of stress for both businesses and households. Rising tariffs from the Electricity Company of Ghana (ECG), coupled with ongoing power supply issues, have placed significant strain on consumers.
These challenges have now reached a new peak in 2025, with an expected 14.75% increase in electricity tariffs and a 4.02% increase in water tariffs. This further compounds the difficulties already faced by businesses.
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Rising Tariffs: A Trend Since 2022
The steady climb in electricity tariffs began in 2022 when the Public Utilities Regulatory Commission (PURC) approved a 27.15% rise in electricity prices, alongside a 21.55% increase in water tariffs. According to the PURC, these increases were driven by escalating fuel prices, inflation, and the financial challenges faced by ECG.
For many businesses, the 2022 hike was the beginning of a worrying trend that would see tariffs continue to rise in the subsequent years. In 2023, businesses felt the effects of further hikes, including a 29.96% increase in February, followed by an additional 18.36% increase in June.
As 2024 rolled in, businesses faced a series of smaller tariff increases, including an average 5% rise in electricity prices. These adjustments were part of efforts by the government and ECG to stabilize the sector, but despite the smaller increases, the overall trend remained upward. With 2025 marking another substantial hike in electricity tariffs, businesses now face even higher operational costs.
The Latest Increase and Its Impact on Businesses
The anticipated 14.75% increase in electricity tariffs, effective in May 2025, adds to the financial strain that businesses have been dealing with since 2022. For many enterprises, especially small and medium-sized businesses (SMEs), the cumulative impact of these ongoing increases has been significant. Electricity is a critical resource for a wide range of industries, including manufacturing, retail, and services. However, the rising costs of power are becoming increasingly difficult to absorb.
For some businesses, this increase could force them to raise prices to cover the additional expenses. In turn, this could lead to reduced demand for their goods and services. Additionally, businesses may be forced to scale back operations or cut costs in other areas, which could result in layoffs or reduced investments. With power outages and disruptions still a persistent issue, many businesses may increasingly turn to backup generators, which would only add another layer of cost to their already strained budgets.
Beyond businesses
The effects of rising electricity tariffs extend beyond the businesses directly impacted. The ripple effect is likely to spread across various sectors, particularly those in energy-intensive industries. These businesses may need to reduce operating hours, slow production, or even temporarily shut down due to ongoing power shortages. In the manufacturing sector, for example, power outages could cause delays in production schedules, further straining profitability for companies already grappling with higher energy costs.
Small businesses, which often operate on thin margins, could feel the hardest impact. These businesses may not have the financial resources to invest in energy-saving technologies or alternative energy sources, making them more vulnerable to the rising costs of electricity. As a result, many small businesses could be forced to either raise their prices, potentially leading to a decline in customer demand, or make difficult decisions regarding their future viability.
What’s Next for Ghana’s Electricity Tariffs?
With the 14.75% increase set to take effect in May 2025, the future of electricity tariffs in Ghana remains uncertain. PURC have justified these tariff hikes, citing the need for financial stability in the power sector. However, many businesses are concerned that if this trend of rising tariffs should continue, it could potentially lead to further financial strain in the coming years.
Last Updated on April 12, 2025 by Samuel Kwame Boadu
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Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.
