A carefully regulated charge on overdue credit bills could improve payment discipline, but only if the utility fixes its own billing and earns the right to enforce.
Electricity is not a costless promise. 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 should stop treating that transfer of cost as harmless.
The case is urgent. The IMF’s 2026 review estimated Ghana’s energy-sector revenue-cost shortfall at about US$1.4 billion in 2025, down from US$1.6 billion in 2024, while stressing that financial risks remain (IMF, 2026). Better collections contributed to the improvement, alongside tariff changes, currency movements and lower reliance on liquid fuels. That matters: no single collection measure can close a gap driven by several structural causes.
A modest, transparent interest charge on overdue postpaid balances should therefore be considered as one instrument in ECG’s revenue-assurance toolkit. Its purpose is not to punish customers or manufacture profit from hardship. It is to change the economics of strategic delay. In standard deterrence theory, conduct is affected by the expected cost of non-compliance: if postponing payment is free, a customer with cash may rationally use the utility as an involuntary lender (Becker, 1968). A disclosed, proportionate charge can reduce that incentive and compensate ECG, in part, for the time value of money.
But the legal route is decisive. Ghana’s 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. That provision is not a blank cheque for ECG to add a universal late fee to every bill. The company should seek an explicit PURC-approved framework; covering eligible accounts, the rate or calculation method, notice, grace period, disputes and review, before charging customers. ECG already recognizes that regulated electricity charges are subject to PURC approval (ECG, n.d.).
The design should be narrow and operationally credible. Start with large commercial and industrial postpaid accounts, plus clearly defined institutional accounts, where balances are material and credit terms are explicit. Apply simple, non-compounding interest only to undisputed principal after a clear due date and reasonable grace period. Send advance notice and a monthly statement showing the principal, days overdue, rate, calculation and appeal route. Suspend accrual on the genuinely disputed portion while ECG investigates. Offer structured installments to customers facing temporary cash-flow difficulty. Exclude lifeline and low-value household accounts from the initial phase.
This is not merely a matter of adding a line to an invoice. 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: Sualihu and Rahman’s study of ECG customers in Greater Accra found that shorter payment transactions, better service quality and customer satisfaction were associated with shorter payment periods (2014). 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 the rules and publish plain-language terms. ECG should segment eligible accounts by balance, payment history and dispute status; notify customers at least one billing cycle ahead; and offer digital statements and low-friction payment channels. 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.
Judge the pilot by cash recovered, not interest booked. Publish the change in days sales outstanding, the share of undisputed balances paid by due date, principal cash accelerated, repeat arrears, dispute rates, customer complaints, administrative cost and any disconnection outcomes. Count the interest actually collected separately. If ECG accrues charges that customers contest or cannot pay, it has created a larger receivable, not stronger revenue. The World Bank’s review of more than 180 utilities likewise frames financial health as a combined challenge of cost, losses, payment collection, billing and planning—not a single tariff or penalty lever (World Bank, 2024).
There is also an obligation on the state. Public entities cannot be allowed to accumulate arrears and then expect households and private firms to finance them. Government agencies should budget for electricity, pay within agreed terms, and disclose overdue balances. ECG, for its part, must publish timely, independently verifiable collection data and demonstrate that billed revenue reaches the sector through transparent allocation mechanisms.
Ghana does not need another blunt charge passed quietly to consumers. It needs a fair credit policy that distinguishes inability to pay from avoidable delay, and a distributor competent enough to bill accurately before it demands interest. Properly authorized, limited to material postpaid credit, and evaluated against real cash outcomes, default interest can make payment discipline more rational and reduce ECG’s financing burden. The firm test is simple: will customers who can pay settle sooner, while customers with valid disputes and genuine hardship are treated fairly? If ECG and PURC cannot answer yes to both parts, the policy is not ready. If they can, it is time to stop making reliable payers subsidize free credit for everyone else.
Sources
Becker, G. S. (1968). Crime and punishment: An economic approach. Journal of Political Economy, 76(2), 169–217. https://doi.org/10.1086/259394
Electricity Company of Ghana (ECG). (n.d.). Current tariff and regulated charges. https://www.ecg.com.gh/index.php/en/services/billing-centre/current-tariff
Energy Commission, Ghana. (2005). Electricity Supply and Distribution (Technical and Operational) Rules, 2005 (L.I. 1816), r. 23(4)(b). https://energycom.gov.gh/newsite/index.php/regulation/electricity-transmission-and-distribution
International Monetary Fund (IMF). (2026). Ghana: 2026 Article IV consultation and sixth review under the ECF arrangement, Country Report No. 26/212. https://www.elibrary.imf.org/abstract/journals/002/2026/212/article-A001-en.xml
Sualihu, M. A., & Rahman, M. A. (2014). Payment behaviour of electricity consumers: Evidence from the Greater Accra Region of Ghana. Global Business Review, 15(3). https://doi.org/10.1177/0972150914535135
World Bank. (2024). The Critical Link: Empowering Utilities for the Energy Transition. https://www.worldbank.org/en/topic/energy/publication/the-critical-link-empowering-utilities-for-the-energy-transition