GNCCI: Electricity Tariff Increase Unlikely to Affect Prices of Goods and ServicesGNCCI: Electricity Tariff Increase Unlikely to Affect Prices of Goods and Services

The Ghana National Chamber of Commerce and Industry (GNCCI) has expressed confidence that the recent upward adjustment in electricity tariffs is unlikely to trigger a general rise in the prices of goods and services. According to the Chamber, although the increase will marginally raise production costs, it is not significant enough to influence broader pricing trends in the market.

This follows the Public Utilities Regulatory Commission’s (PURC) announcement of a 2.45% hike in electricity tariffs across all customer categories, effective July 1, 2025. The adjustment was made as part of the Commission’s quarterly tariff review process. Water tariffs, however, have been left unchanged for the third quarter of the year.

Reacting to the development, the Chief Executive Officer of GNCCI, Mark Badu-Aboagye, said the increase, though not ideal, remains modest and is unlikely to create upward pressure on the prices of consumer goods and services.

“This 2.45% increment, in itself, is quite minimal. While electricity prices in Ghana are already relatively high, this specific adjustment is not large enough to have a pronounced effect on the overall cost of production,” Badu-Aboagye told Citi Business News. “We are hopeful that if the key economic indicators continue to improve, we may even see electricity tariffs drop in the near future, which will benefit the business community,” he added.

Mr. Badu-Aboagye acknowledged that electricity remains one of the major cost components for many businesses, particularly in the manufacturing and services sectors. However, he maintained that businesses are unlikely to pass on the additional cost to consumers due to the relatively small scale of the increase.

Meanwhile, the decision by the PURC to increase electricity tariffs has been met with criticism from sections of civil society. Two organisations, CUTS International Accra and the Center for Environmental Management and Sustainable Energy (CEMSE), have jointly called on the Commission to suspend the tariff hike. They argue that current macroeconomic trends do not support such a decision and have called for greater transparency and responsiveness in the tariff review process.

In a joint statement signed by Appiah Kusi Adomako, West Africa Regional Director for CUTS International, and Benjamin Nsiah, Executive Director of CEMSE, the groups said recent macroeconomic improvements—such as the appreciation of the Ghanaian cedi against the US dollar and declining inflation rates—should have led to a reduction in tariffs rather than an increase.

“The PURC’s tariff-setting formula takes into account factors like inflation and exchange rates. Given the recent gains in both areas, the decision to increase tariffs is not justifiable,” the statement read. The civil society groups believe that many Ghanaians, especially households and small businesses, were expecting some relief in their electricity bills and are now burdened by what they view as an unnecessary cost.

Despite these concerns, the PURC has defended its decision, stating that the adjustment is necessary to ensure cost recovery and continued service delivery by utility providers. According to the Commission, the review reflects currency fluctuations, fuel prices, and operational costs incurred by the electricity distribution companies.

As the debate continues, stakeholders are closely watching how the marginal tariff increase will affect the broader economy, particularly in terms of inflation and consumer spending. While the GNCCI maintains that the hike will not lead to a significant increase in the cost of goods and services, consumer advocacy groups remain concerned about the cumulative impact of such adjustments over time.

For now, businesses and consumers alike are adjusting to the new tariff regime, even as conversations about energy affordability and efficiency continue to shape Ghana’s utility sector reforms.