Government institutions are failing to pay their water bills, with compliance rates plunging to just approximately 18%, deepening the financial crisis facing the Ghana Water Company Limited (GWL), according to a new situational analysis report.
The report revealed that payment compliance by Ministries, Departments and Agencies (MDAs) declined sharply from 92.53% in 2022 to only 18.40% in 2024, significantly reducing revenue inflows to the state-owned utility and undermining its ability to sustain operations and invest in infrastructure improvements.
This means that more than 80% of government institutions are either defaulting on their water bills entirely or paying only a fraction of what they owe, despite being among the largest consumers of treated water in the country.
“Many Ministries, Departments, and Agencies (MDAs) claim they have no budget provision for water bills. Government agencies are effectively consuming water without payment, undermining GWL’s revenue base and creating a structural funding gap. This is compounded by the difficulty of disconnecting government institutions for non-payment. Until MDA payment discipline is enforced — potentially through budget ring-fencing or direct deductions at the Controller & Accountant General level — this revenue leakage will persist,” the report stated.
Revenue losses worsening financial strain
The report noted that the widespread non-payment by public institutions has created a major revenue gap for Ghana Water, which depends heavily on customer payments to fund operations, maintain pipelines, and expand supply systems.
GWL currently serves nearly one million customers nationwide, operating 86 water supply systems across urban centres.
However, the company is already burdened with a debt stock of GH¢14.63 billion, with monthly debt servicing obligations of about GH¢38.94 million, representing nearly 23% of its monthly revenue.
The situation is further compounded by high operational costs, particularly electricity, which accounts for about 50% of production costs, as well as ageing infrastructure and widespread water losses.
Water losses and supply deficit add pressure
Beyond the revenue challenges, Ghana Water is also losing more than half of the water it produces. The report indicated that 52.2% of treated water is classified as non-revenue water, meaning it is lost through leakages, illegal connections, faulty meters, or unbilled consumption.
At the same time, national urban water demand continues to exceed supply. Ghana Water produces about 945,275 cubic metres of water daily, compared to an estimated demand of 1.19 million cubic metres, resulting in a supply deficit of about 21%.
These challenges have contributed to persistent water shortages in many urban areas, forcing households and businesses to rely on water tankers and alternative sources.
Limited enforcement options against state institutions
The report highlighted the difficulty in enforcing payment compliance among government institutions, as disconnecting water supply to public facilities such as hospitals, schools, and security agencies could disrupt essential services.
Many public institutions reportedly cite lack of budgetary allocations for utility bills as the primary reason for their inability to settle outstanding water charges.
Call for urgent reforms
The situational analysis stressed the need for urgent reforms to improve revenue collection, strengthen enforcement mechanisms, and ensure government institutions honour their financial obligations.
Experts warn that failure to address the growing payment default among public institutions could weaken Ghana Water’s financial sustainability and undermine efforts to expand access to safe and reliable water supply.
The findings underscore broader structural challenges facing Ghana’s urban water sector, including ageing infrastructure, rising operational costs, illegal mining pollution, and growing demand driven by rapid urbanisation.
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
Source: www.myjoyonline.com
