Ghana among best-performing electricity tariff regimes in Africa

The Public Utilities Regulatory Commission (PURC) has ranked Ghana as one of the best-performing countries in Africa when it comes to electricity pricing.

In a statement shared with Citi News on Monday, October 13, the PURC noted that it compared electricity tariffs across several African countries as of March 2025, and found that Ghana’s tariff system is well-structured, cost-reflective, and financially sustainable.

The study was carried out under the PURC Act 1997 (Act 538) to guide policy decisions and improve transparency in utility pricing.

According to the PURC, Ghana uses a hybrid tariff-setting approach. This means electricity prices are based on the actual cost of generating, transmitting, and distributing power, while still considering the impact on consumers. The model helps utilities like ECG, NEDCo, and VRA remain financially stable without placing too much burden on users.

The report found that Ghana’s electricity tariffs are generally moderate compared to other African countries. In West Africa, for example, Ghana’s tariffs are higher than in countries like Nigeria, which heavily subsidise power, but lower than in countries like Liberia and Sierra Leone that face high operational costs.

Ghana’s tariffs are also lower than those in Southern African countries such as South Africa and Namibia, where industrial power prices are among the highest due to environmental taxes and infrastructure costs.

Although Ghana’s tariffs are higher than those in East and North Africa, where prices are kept low through subsidies and cheaper hydropower or fossil fuels, the PURC warns that such models are often unsustainable and distort market prices.

The study also highlights Ghana’s use of a block tariff system for residential users. This structure charges lower rates for basic electricity use to support low-income households, while higher rates apply to heavier usage—ensuring fairness and cost recovery.

In addition, Ghana was noted for having strong regulatory systems and a transparent approach to price setting. The PURC adjusts tariffs periodically to reflect changes in fuel prices, currency exchange rates, and utility performance, helping to maintain stability in the power sector.

The Commission concluded that Ghana’s electricity tariff regime strikes a healthy balance between affordability for consumers and financial viability for utility providers—making it one of the most effective and reform-oriented models in Africa.