The Ghana National Chamber of Commerce and Industry (GNCCI) has asked the Public Utilities Regulatory Commission (PURC) to ensure that tariffs for 2022 favour industries in their recovery from the adverse impact of the COVID-19 pandemic.
The Chamber urged PURC, “to consider cushioning the business community with a comparatively lower tariff that is reflected in the production capacity of manufacturing and key service sectors.”
It indicated that in the midst of the current economic challenges brought about by exchange rate pressures, Cedi depreciation, inflation, and fuel increment among others, it was important for any adjustment to “favour industries.”
The call by the Chamber is necessitated by moves by utility service providers for a high increase in tariffs.
The Ghana Water Company (GWCL), and Electricity Company of Ghana (ECG) are respectively, calling for 334 per cent and 148 per cent increment in tariff; Northern Electricity Company (NEDCo) 118 per cent, Ghana Grid Company (GRIDCo), 48 per cent and Volta River Authority (VRA) 37 per cent.
Similarly, the Ghana National Petroleum Corporation (GNPC) and Ghana Gas Company have underscored the need for an adjustment in tariffs for the transportation of gas to the power producers.
In a statement issued by GNCCI to the Ghana News, it noted that any increment in energy prices would add to the cost of doing business, which would impede the recovery of private businesses from COVID-19.
“Already, businesses are struggling to recover from the impact of the pandemic in addition to the rising cost of doing business. Therefore, further increases particularly in energy cost will be detrimental to the private sector.”
The statement indicated that with the integrated African market zone, the power tariff component of products would be a defining factor, particularly for businesses.
“Ethiopia and Kenya have better tariffs than Ghana; thus, making their products competitive. Government must remain committed to implementing the Coordinated Programme of Economic and Social Development to support the private sector,” it stated.
The statement pointed out that energy was one of the critical cost components of the business, noting that while there had been improvements in the energy situation over the last few years, the energy cost to businesses remained up to 30 per cent of the cost of operation.
It also noted that in Ghana, businesses paid much higher energy in order to subsidise households, while in many other countries, households paid higher energy costs to subsidise industry.
The Chamber has, therefore, urged the Government to “re-align the electricity tariff structure in support of industrial development.”
This is in line with the Coordinated Programme of Economic and Social Development Policies (CPESDP) 2017 -2024, which enjoins the Government to ensure reducing the cost of doing business and lowering production costs.
Already, the Institute for Energy Security (IES) – a research and energy security advocate, has projected that electricity and water tariffs were likely to go up in July when PURC was expected to announce tariffs for 2022.
It has, therefore, asked Ghanaians to, “brace ourselves for electricity tariff increment so we can save both the distribution and transmission grid from collapsing and have some reliable power supply.”