The Electricity Company of Ghana (ECG) has been urged to implement a fair credit policy to reduce the free lending of electricity to customers who delay payment. According to Dr. Elikplim Kwabla Apetorgbor, ECG buys power, moves it across a network, and must pay suppliers whether a postpaid customer settles on time or not. When a customer who can pay holds back payment, the utility is forced to finance that delay, with working capital, supplier arrears, or ultimately pressure on public finances and other customers.
Ghana's energy sector has a significant revenue-cost shortfall, estimated at about US$1.4 billion in 2025, down from US$1.6 billion in 2024, according to the IMF's 2026 review. Better collections contributed to the improvement, alongside tariff changes, currency movements, and lower reliance on liquid fuels. A modest, transparent interest charge on overdue postpaid balances could be considered as one instrument in ECG's revenue-assurance toolkit to change the economics of strategic delay.
The proposed interest charge on overdue postpaid balances should be designed to change the economics of strategic delay, not to punish customers or manufacture profit from hardship. A disclosed, proportionate charge can reduce the incentive for customers to delay payment and compensate ECG for the time value of money. However, the legal route is decisive, and ECG should seek an explicit PURC-approved framework covering eligible accounts, the rate or calculation method, notice, grace period, disputes, and review.
The Electricity Supply and Distribution (Technical and Operational) Rules, 2005 (L.I. 1816), Rule 23(4)(b), contemplates payment on account with interest for large amounts, with the relevant threshold determined by PURC. ECG should start with large commercial and industrial postpaid accounts, plus clearly defined institutional accounts, where balances are material and credit terms are explicit. A simple, non-compounding interest should be applied only to undisputed principal after a clear due date and reasonable grace period.
ECG must first make bills accurate, deliver them on time, reconcile payments quickly, and resolve complaints before the due date whenever possible. Ghanaian evidence warns against a penalty-only strategy, as shorter payment transactions, better service quality, and customer satisfaction were associated with shorter payment periods. Customers are more likely to accept firm enforcement when the bill is intelligible, the meter is trusted, and the utility responds when something goes wrong.
A 90-day design phase followed by a 12-month pilot would make the proposal testable. PURC, ECG, and consumer representatives should agree on the rules and publish plain-language terms. The pilot should compare treated accounts with similar accounts not yet covered, so changes can be distinguished from seasonality, tariff adjustments, or general collection drives. The change should be judged by cash recovered, not interest booked.
The World Bank's review of more than 180 utilities frames financial health as a combined challenge of cost, losses, payment collection, billing, and planning—not a single tariff or penalty lever. There is also an obligation on the state to budget for electricity, pay within agreed terms, and disclose overdue balances. ECG should publish timely, independently verifiable collection data and demonstrate that billed revenue reaches the sector through transparent allocation mechanisms.
Key points
- ECG should implement a fair credit policy to reduce free lending of electricity
- A modest, transparent interest charge on overdue postpaid balances could be considered as one instrument in ECG's revenue-assurance toolkit
- The proposed interest charge should be designed to change the economics of strategic delay, not to punish customers or manufacture profit from hardship
