Cedi appreciation must lead to a reduction in electricity tariffs – Paul Twum Barimah tells Mahama

Former MP for Dormaa East, Paul Apraku Twum Barimah, has urged the Public Utilities Regulatory Commission (PURC) and former President John Dramani Mahama to lower electricity tariffs. He believes this should happen due to the recent appreciation of the Ghanaian cedi.

Twum Barimah stated that Ghanaians deserve to benefit from the cedi’s stabilization against the U.S. dollar. He emphasized that it is fair for utility tariffs, especially electricity, to decrease in line with current economic trends.

He noted that as the cedi strengthens, there is increasing pressure on PURC to consider these gains in future tariff reviews. Stakeholders are calling for a transparent pricing mechanism that reflects economic indicators. This would ensure consumers benefit from favorable market conditions.

As of May 21, 2025, the cedi traded at GHS12.22 per U.S. dollar. This represents an 8.44% gain since November 2024 when it was GHS16.53. The Bank of Ghana's $490 million forex interventions contributed significantly to this performance.

Despite this positive trend, PURC announced a 14.75% increase in electricity tariffs starting May 3, 2025. This increase was based on a weighted average exchange rate of GHS15.6974 per dollar, which is higher than the current market rate.

The Commission cited several reasons for this increase: exchange rate volatility, inflation, fuel costs, and recovering a revenue shortfall of GHS976 million from 2024.

Stakeholders argue that since fuel imports are priced in U.S. dollars, a stronger cedi should reduce fuel costs and electricity production expenses. They believe that just as depreciation leads to tariff hikes, appreciation should result in reductions.

Calls are growing for PURC to reassess its pricing formula and adopt a more responsive approach reflecting real-time economic changes.

As discussions continue, pressure mounts on regulators and policymakers to ensure ordinary Ghanaians feel the benefits of the cedi’s recovery.