Cedi appreciation must reflect in lower tariffs – Paul Twum Barimah

Cedi's Upward Trajectory

As of May 21st, the cedi strengthened to GHS12.22 per U.S. dollar. This marks an 8.44% gain from GHS16.53 in November 2024.

Several factors contributed to this appreciation. The Bank of Ghana intervened with $490 million in forex support. Additionally, gold reserves increased, and gross international reserves rose to $9.4 billion in March 2025, up from $6.2 billion a year earlier.

Tariff Hike

The PURC recently adjusted tariffs based on a weighted average exchange rate of GHS15.6974 per U.S. dollar. This rate is higher than the current cedi value.

The Commission aims to recover 50% of a revenue shortfall of GHS976 million from previous quarters in 2024.

Stakeholder Reactions

The Ghana Hotels Association and the Ghana Union of Traders’ Association (GUTA) expressed concerns about the tariff hikes.

The Hotels Association noted that electricity costs over 20% of operational expenses. They warned that these increases could threaten business sustainability.

GUTA criticized the PURC's decision as unjustified, citing inefficiencies in the utility sector that burden consumers.

Tariff Reassessment

With the cedi's appreciation, stakeholders argue for reassessing electricity tariffs. They believe tariffs should reflect lower fuel import costs since fuel is priced in U.S. dollars.

If currency depreciation justifies tariff increases, then appreciation should lead to reductions, they argue.

This would provide relief to both consumers and businesses alike.

Looking Ahead

As the cedi continues its upward trend, pressure mounts on the PURC for future tariff reviews.

Stakeholders advocate for a transparent pricing mechanism aligned with economic indicators. They want consumers to benefit from favorable market conditions moving forward.