BoG Governor Confident Inflation Will Hit Target Despite Utility Tariff Risks

Accra, Sept. 17, 2025 – Dr. Johnson Pandit Asiama, Governor of the Bank of Ghana (BoG), has expressed confidence that inflation will fall within the Central Bank’s medium-term target band of 8 ± 2 percent by the end of 2025, despite risks posed by possible hikes in electricity and water tariffs.

Speaking at the 126th Monetary Policy Committee (MPC) press briefing in Accra on Wednesday, Dr. Asiama announced that the BoG had reduced the monetary policy rate by 350 basis points to 21.5 percent from 25 percent, citing continued disinflation and improved macroeconomic conditions.

The optimism comes against the backdrop of proposals by the Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL) for sharp tariff increases—225 percent and 280 percent, respectively—as part of consultations for the 2025–2030 Multi-Year Tariff Review. ECG argued the hike was necessary to avert financial collapse, while GWCL cited rising costs from illegal mining and water pollution.

Dr. Asiama acknowledged that such adjustments could weigh on the disinflation process but stressed that “maintenance of an appropriate monetary policy stance, strong sterilisation efforts, ongoing fiscal consolidation, and adequate reserve buffers should sustain the downward inflation trend.” He added that targeted subsidies for low-income households and energy efficiency programmes would help ease the burden of higher tariffs on consumers.

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The BoG Governor noted that Ghana is already seeing a sustained decline in core inflation, supported by favourable global commodity prices, stable food supply from improved weather conditions, and fiscal reforms under the International Monetary Fund’s (IMF) Extended Credit Facility. Inflation has steadily declined for eight consecutive months, dropping to 11.5 percent in August 2025 from 12.1 percent in July, according to the Ghana Statistical Service.

The IMF has backed utility tariff adjustments as a measure to fix inefficiencies and attract investment into Ghana’s energy sector. Ms. Julie Kozack, IMF Director of Communications, explained last week that tariff reforms would help prevent the accumulation of arrears and ensure financial stability in the power sector.

However, President John Dramani Mahama has rejected the proposed 225 percent hike by ECG, insisting that his government would explore alternative measures to mobilise resources without passing the burden onto consumers. He argued that ECG must instead cut costs, reduce debt, and operate more efficiently, especially as part of reforms to support the government’s 24-hour economy initiative.

“The responsibility is for the company to work diligently rather than overburdening Ghanaians with exorbitant tariffs,” the President stressed.