Gov’t eyes US$0.07/kWh industrial power 

… but World Bank’s B-READY flags deepening regulatory- efficiency gap

By Ebenezer Chike Adjei NJOKU

Plans are underway to cut industrial electricity prices to between US$0.04 and US$0.07 per kilowatt-hour (kWh), driven largely  by the 24-hour economy programme, as government seeks to improve competitiveness and attract private capital, according to Augustus Tannoh, Presidential Advisor for the 24-Hour Economy and Accelerated Export Development.

Currently, the average cost of industrial electricity in Ghana for most companies is approximately US$0.13 to US$0.17 per kWh.

In remarks during the World Bank’s Business Ready (B-READY) report launch, Mr. Tannoh said high energy costs remain a major disadvantage for Ghana compared with neighbouring countries competing for industrial investment.

“We are competing with neighbours who have determined that for capital formation in the private sector, one of the key components for participation and attraction of private capital is energy and energy pricing,” he said.

He said government has therefore decided that agro-industrial and industrial parks developed under the 24-hour economy initiative would benefit from lower power tariffs.

“We took the view that in the agricultural parks and industrial parks we are going to develop as part of the 24-hour programme, which is basically private sector driven, we will cut the energy costs to about US$0.07 per kilowatt hour; so, between US$0.04 and US$0.07 per kilowatt hour,” he said.

Mr. Tannoh added that renewable energy will underpin the strategy. “Where we have to go on a big scale, we still maintain US$0.07 per kilowatt hour – but it has to be renewable.”

Beyond energy, he outlined a series of structural constraints affecting Ghana’s investment climate, including land access, financing costs and labour productivity.

“Land is a big problem. Access to land, title to land,” he said, describing situations in which investors must negotiate with “3o to 50 families” only to face competing claims after acquisition.

He also pointed to the cost and structure of capital. “It is really impossible to see how anybody can grow an economy with interest rates in the region of 30-36 percent,” he said, adding that short loan tenors of one to two years make long-term investment unviable.

On labour, Mr. Tannoh said Ghana retains a cost advantage but warned that productivity remains critical. “You may have low cost of labour, but the attitude and ethics of labour cannot vary much in terms of the productivity of that labour force,” he said.

B-READY

The B-READY report presented at the event provides empirical backing to these concerns. The assessment shows Ghana scoring 69 out of 100 on regulatory framework, placing it in the top-60 percent of economies measured.

However, performance drops sharply on execution with scores of 50 on public services and 52 on operational efficiency – leaving the country in the bottom 40 percent globally on how regulations translate into actual business outcomes.

Financial Services delivery was a bright spot, recording a score of 72.

Commenting on the report, World Bank Division Director for Ghana, Liberia and Sierra Leone Robert Taliercio said: “This gap between strong rules and slower delivery shapes how investors assess risk, cost and predictability”.

“This gap matters because the real win is jobs… and jobs at scale come from investment. Gross capital formation, which measures how much an economy invests in productive assets such as machinery, buildings and infrastructure, is about 10 percent of GDP in Ghana. In economies that are successfully industrialising, this figure is often more than twice as high – like 30 percent in Morocco,” he noted.

“This is where B-READY becomes especially important. The report can help explain why capital investment has not yet flowed at the scale needed to generate jobs rapidly, even when the underlying rules are relatively strong,” Mr. Taliercio continued.

One of the weakest areas identified is market competition – where Ghana scores just 34 out of 100, placing it in the bottom 20 percent of economies assessed. The report cites limited enforcement capacity, weak investigative powers and gaps in merger control as key constraints undermining productivity and private sector confidence.

Land administration also emerged as a major bottleneck. While Ghana’s legal framework for property and construction is rated relatively strong, operational outcomes are poor. According to the report, transferring property takes an average of 182 days, with costs equivalent to around 170 percent of Gross National Income (GNI) per capita. Obtaining a construction permit takes about 125 days at a cost of approximately 143 percent of GNI per capita.

In business entry, Ghana performs well on formal rules but less well on cost and efficiency – particularly for foreign investors. Registering a domestic firm takes about 14 days while foreign-owned firms require around 21 days and face costs equivalent to more than 80 percent of GNI per capita, compared with around 6 percent for local firms.

Infrastructure reliability remains another constraint. Electricity connections take an average of 28 days, but firms experience about three power outages per month, according to the report. As a result, more than two-thirds of businesses rely on generators to manage supply disruptions. Internet connections are faster, averaging three days, though service reliability remains uneven.

Speaking at the launch, IFC Senior Country Manager for Benin, Ghana, Liberia, Sierra Leone and Togo Kyle Kelhofer said the report should be viewed as a guide for prioritising reforms rather than a judgement on past performance.

“This is not a report card. This is not a finger-pointing exercise, it is more of a potential roadmap of where we are going to make efforts. This will go a long way to show where the biggest bang for the buck is, as far as efforts to improve policies and improve the environment,” he explained.

Mr. Kelhofer noted that many of the constraints identified are administrative rather than fiscal.

“Most of these findings include administrative, regulatory and coordination improvements that could unleash growth quickly. Not necessarily financially… the changes will come from the stroke of a pen, not from a bank account,” he added.

He further stated that the report highlights sectors aligned with the government’s 24-hour economy agenda, including agribusiness, garments, light manufacturing, logistics and export-oriented services.

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