News Guide Africa

Tag: AfCFTA

  • Stakeholders propose reforms and efficiency of utilities sector against tariff adjustment

    Stakeholders propose reforms and efficiency of utilities sector against tariff adjustment

    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.

  • Feature: PAPSS awareness creation; whose job?

    Pan African Payment and Settlement System (PAPSS)

     

    By Adnan Adams Mohammed

    A recent survey report indicates that about half of African businesses are not aware of the existence of the Pan African Payment and Settlement System (PAPSS).

    The report by Future of Trade acknowledges that PAPSS holds immense potential to transform intra-African trade by streamlining payments, reducing costs, and boosting efficiency, achieving widespread adoption across the continent requires overcoming several challenges.

    “A significant hurdle lies in the diverse regulatory landscapes, financial infrastructures, and oversight systems across African nations. Central banks need to find ways to reconcile these differences to ensure PAPSS functions smoothly”, the report pointed out.

    Establishing a system for settling transactions and determining exchange rates for currencies with fluctuating values presents another challenge. This, it added will be crucial for smooth cross-border transactions.

    The report called for comprehensive campaigns to educate businesses about PAPSS and its advantages could significantly accelerate adoption.

    Pan African Payment and Settlement System (PAPSS)

    “Africa’s business leaders aware of PAPSS are strongly positive about its ability to boost intra-African trade,” the report stated.

    Furthermore, a resounding 98% of business leaders acknowledge PAPSS’ potential to positively impact intra-African trade.

    The survey also revealed that 98% of business leaders across Africa believe their central banks should expedite participation in the PAPSS network. This strong support highlights the business community’s confidence in PAPSS and their desire to see it implemented widely.

    The Report concludes that, PAPSS offered a promising solution for simplifying and enhancing intra-African trade, stating, that by addressing the challenges of regulatory differences, volatile exchange rates, and low business awareness, PAPSS can unlock the full potential of this innovative payment system.

    Our editorial team are in awe wondering whose job it is to create the awareness and publicity of the PAPSS. The team are very capable of handling any media publicity campaign and do not mind if contracted with such job for immense results.

  • List on local stock exchanges – mining coys told

    List on local stock exchanges – mining coys told

    Vice-President Mahamudu Bawumia has challenged mining companies operating in Ghana and the entire West African sub-region to work with governments and regulatory bodies to establish a mining index on local stock exchanges to allow both the owners and investors in the minerals to benefit from its exploitation.

    The benefits of a mining index on the local bourse are enormous, enabling both the State, Mining Companies, beneficiary communities and investors to attract the necessary capital and built-in incentives for all involved, Dr Bawumia indicated.

    Speaking at the opening session of the three-day West African Mining and Power Exhibition and Conference (WAMPOC/WAMPEX) in Accra, last week, Dr Bawumia urged African countries to hasten the development of the capacity to interact with the world’s natural resources banks, fund managers and the leading stock exchanges in the world to allow locals to benefit more from the minerals bequeathed to them by nature.

    “In this regard, let me sound a clarion call on the big mining companies operating here in Ghana and indeed, the West African sub-region, to work towards the emergence of a mining index on our Stock Exchanges and thereby accelerate their growth and significance in African mining.

    “This will require deep collaboration among the local stock exchanges, their regulators, as well as mining firms to incentivize Ghanaians to own listed greenfield exploration projects as the upside on such investments tend to be higher”, he noted.

    While acknowledging the enormous resources found on the African continent, the Vice President called for a careful balance between the profit-seeking needs of investors, and the sustainable living needs of the communities within which the minerals are found.

    “Yes, Africa is endowed with many mineral resources but while the availability of the resources is important, the over-riding aim for all parties should be the evolution of a carefully balanced mechanism to ensure that the resources of the state benefit the owners of the resource and at the same time extend benefits to investors to ensure that the State is able to sustainably attract the needed capital, investment and technical know-how from a world which has come to the realisation that Africa is the continent of the future.

    “Significantly, the African Union has been reassessing critically the real significance of mining to host country economies over the years. As a result of these efforts, the African Mining Vision (AMV) emerged as far back as 2009. In essence, the African Mining Vision seeks to ensure the transparent, responsible, equitable and optimal exploitation of Africa’s Mineral resources for broad-based sustainable socio-economic development for the host Governments and its citizenry,” he disclosed.

    He challenged African countries and mining companies to collaborate on a sub-regional and even regional basis to derive the most benefit from the exploitation of Africa’s mineral resources.

    “We need a strategy to enable us to pool the mineral resource-rich countries in West Africa and beyond together to assume the mantle in the transformation of our economies with a greater awareness of mining as a more comprehensive and transformational economic activity and as a key backbone for our country.

    “Given the paucity of the size of stand-alone countries, it is only proper that we consider regional dimensions to local content since individual African Country Markets may be too small to elicit the much-needed investments. Investors desire economies of scale to justify such investments and it is necessary that we consider the regional economic blocs in Africa as sub-markets which can then collectively constitute the building blocks of the African Continental Free Trade Area (AfCFTA).”