The Executive Director of the Centre for Environmental Management and Sustainable Energy, Benjamin Nsiah, has attributed the recently announced 9% rise in electricity tariffs to government inefficiencies and poor contractual decisions within the energy sector.
According to Mr. Nsiah, the increment is not the result of a lack of subsidies, as widely perceived, but rather due to structural and financial challenges created by the state itself.
He argued that the government’s failure to pay for its own electricity consumption has significantly contributed to revenue gaps in the sector.
“The 9% increase in electricity tariffs is because the government does not pay for electricity,” he said on Onua FM.
Mr. Nsiah further indicated that “unfavourable contracts signed with Independent Power Producers (IPPs) and gas suppliers” have worsened the financial strain on the sector.
He described these agreements as “bad contracts” that continue to burden the energy value chain.
Clarifying the issue of subsidies, he stressed that the government does not provide blanket electricity subsidies. Instead, subsidies are reserved strictly for lifeline consumers, those with a monthly electricity consumption of 30 kilowatt-hours (kWh) or less.
“The shortfall arises from weaknesses in the government’s microeconomic management, resulting in under-recoveries rather than an actual subsidy,” he explained.Remove ads
Meanwhile, the Ministry of Energy and Green Transition has responded to concerns raised by the Trades Union Congress (TUC) and the Minority in Parliament following the Public Utilities Regulatory Commission (PURC)’s announcement of the 9% tariff increase, which is set to take effect in January 2026.
Spokesperson for the Ministry, Richmond Rockson, said the adjustment must be viewed within the broader framework of ongoing reforms aimed at stabilizing the energy sector.
According to Mr. Rockson, the current 9% increase represents a significant improvement compared to the previous tariff adjustment of over 27%.
He attributed the reduced increment to deliberate reforms implemented by the government to strengthen the sector’s financial health.
He maintained that while tariff adjustments are difficult, they are necessary to sustain the gains made and ensure long-term stability in power generation and distribution.
The debate over electricity tariffs continues as stakeholders weigh the balance between financial sustainability and consumer affordability.