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Utility tariff adjustment must favour industries, sustain business growth – GNCCI – Citi Business News

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As the Public Utilities Regulatory Commission (PURC) engages stakeholders on electricity tariff adjustment in the face of current economic challenges, the Ghana National Chamber of Commerce and Industry (GNCCI) says any adjustment must favour industries.

According to the GNCCI, further increases, particularly in energy cost, will be detrimental to the private sector.

The GNCCI notes that the PURC must consider cushioning the business community with a comparatively lower tariff that is reflected in the production capacity of manufacturing and key service sectors.

Already, businesses are recovering from the impact of the pandemic in addition to rising cost of doing business.

A statement issued by the GNCCI states that, “Energy is one of the critical cost components of business. While recognizing improvements in the energy situation over the last few years, energy cost to businesses remains too high (comprising up to 30% of cost of operation in some extreme cases). Businesses pay much higher energy in order to subsidize households. Whereas in many other countries, households pay higher energy cost to subsidize industry.”

“As we move into the integrated African market zone, power tariff component of products will be a defining factor. Ethiopia and Kenya have better tariffs than Ghana; thus, making their products competitive.”

They are thus calling on the Government to remain committed to implementing the (CPESDP) to support the private sector.

The Electricity Company of Ghana, ECG, wants tariffs to be increased by 148% for 2022 and with 7.6% average adjustments between the periods of 2023 to 2026.

The sharp proposed increment, according to ECG, is due to the gap between the actual cost recovery tariff and PURC-approved tariffs as well as the cost of completed projects.

The Ghana Water Company, in the same vein, is also proposing an increment in its tariffs to be able to at least recover its costs.

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