Major stakeholders of the Ghanaian economy have continuously mounted pressure against utilities tariff adjustments as it has a negative impact on cost of doing business, cost of living and consequently influencing inflation and the general economy.
Contrary to the recent proposal for utilities tariff increase by over 200% by Electricity Company of Ghana (ECG) and Ghana Water Company, a tax analyst is calling for broader stakeholder engagement to reform the utilities companies and boost their operational efficiency, rather than allowing the utility providers to proceed with their proposed tariff increase.
Francis Timore Boi’s call adds to growing concerns from the Food and Beverages Association of Ghana (FABAG), which has issued a 30-day ultimatum to the government to establish a performance compact that will assess and improve the efficiency of both ECG and GWCL, stressing that, tariff increases should not be the go-to solution, urging a more balanced and consumer-friendly approach.
“A balanced and phased approach is needed,” he explained. “If ECG truly needs more revenue, a sudden 225% increase is quite drastic for consumers. A better approach might involve a phased increase tied to clear milestones such as reducing losses, improving service reliability, and accelerating meter deployment. Many customers have applied for meters and still haven’t received them.
“For example, the expanded lifeline ban for low-income households and also essential services if they can be exempted from the repeated increases to save them and that is why dialogue and stakeholder engagement is critical for me”, he noted.
The tax expert further argued that any tariff review should be conditional and designed to protect the most vulnerable groups and critical sectors of the economy.
“Tariff increases should be conditional,” he added. “We need to protect vulnerable groups and essential sectors. Any tariff adjustment must come with stronger safety nets.”
The debate over ECG’s proposed tariff hike continues to intensify, with industry players calling for efficiency-driven reforms and accountability before any major adjustment in electricity prices.
High utility tariffs hurting Ghana’s competitiveness under AfCFTA
Consequently, the Ghana Union of Traders Association (GUTA) has also raised concerns that Ghana’s current utility tariff regime is undermining the country’s competitiveness within the African Continental Free Trade Area (AfCFTA).
It believes that the high cost of electricity and water is inflating production and operational expenses, which in turn affects the pricing of goods and services and discourages both local and foreign investment.
“We all realise that we are participating in AfCFTA, yet Ghana is lagging behind. We are not competitive, and our goods cannot even compete with those from Togo. The reason is the high cost of doing business here, especially regarding utility tariffs. It has not helped us. The earlier we solve these issues, the better,” GUTA President, Dr. Joseph Obeng, stated at a press conference in Accra last week.
He emphasised that the high cost of utilities continues to erode profit margins, force price increases, and threaten the survival of many small and medium sized enterprises.
GUTA is urging government and regulatory authorities to work with the business community to develop a fair and sustainable tariff structure that supports industrial growth and enhances Ghana’s participation in the AfCFTA market.
FABAG ultimatum
Meanwhile, the Ghana Food and Beverages Association (FABAG) also called on President John Dramani Mahama to implement urgent reforms at the Electricity Company of Ghana (ECG).
According to the association, the persistent increase in utility tariffs, despite ECG’s recurring financial losses, must be addressed as a matter of priority.
The Chairman of the association, John Awuni, stressed that the high cost of electricity is taking a heavy toll on businesses and Ghanaians at large.
“There shouldn’t be any tariff increment. Because no amount of tariff increment can solve the problems of ECG. There must be a reform, and that reform is aimed at reducing the technical and commercial losses to reasonable standards,” he said.
The association also gave the government a 30-day ultimatum to set up a performance compact that will measure and improve the performance of the Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL).
“There’s no effort VRA or GRIDCo will make that can be realised. The inefficiencies in ECG will eat up all those ones, so there’s a need for reforms. Respectfully, we recommend a presidential compact for ECG and GWL.
“We call for a performance compact between the ECG, Ministry of Finance, PURC and the Energy Commission sites under H.E.(President Mahama). ECG and GWL reform is more than a utility issue; it is a matter of national security, economic survival and governance legacy,” he stated.
