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Tuesday, July 5, 2022

AGI frowns on 155% tariff rise


The Association of Ghana Industries (AGI) has issued a statement expressing the private sector’s displeasure with the proposed 155 percent consumer tariff increase, by the

three utility providers (ups).

“After a careful assessment of the rather gloomy situation on the ground and inasmuch as it is acknowledged that some critical remedial measures are long overdue, the AGI notes with some concern that the 155% tariff adjustment is very steep for its members and for Industry as a whole,” the statement said.

The AGI set out wide-ranging recommendations to all key stakeholders suggesting how best to address the energy supply challenges that have led to shoddy and unreliable electric power delivery in recent months.

A seven-point recommendation was targeted at industry regulator, the Public Utilities Regulatory Commission (PURC), including the need to envisage multi-faceted alternative solutions to energy generation, supply and distribution as well as infrastructure expansion and financing, rather than the

continued reliance on the age-old consumer tariff increases as the sole panacea.

The industrialists say Ghana needs a short- medium- and long-term Energy Sector Strategic Development Planning with its concomitant financing strategy and consumer tariff-pricing policy that would guarantee the right of the citizenry and of industry to dependable power supply.

Utility providers should also perennially pursue their revenue collection with vigour and without fear or favour, regardless of the consumer, taking cue from the VAT Service and other similar State revenue collecting agencies.

They also contend that the tenure of office of PURC as well as UPs Boards and Managements should be so structured as not to coincide with the political transfer of office with the view to averting operational and administrative disruptions.

As a nation, PURC should endeavour, as much as possible, to stem the practice where tariff adjustment proclamations are allowed to cause public outcry and industrial panic.

While it is also imperative to assure industry of future stability and availability of competitively priced utilities so that it can, in turn, price goods and services right.

And in case an upward adjustment of utility tariffs becomes necessary, the AGI says it should be graduated and reasonably affordable, contending that steep and huge tariff increases are not good for job retention, business growth and wealth creation.

The AGI also prompts government that urgent and priority steps should be taken to redeem the huge Government outstanding public utility bill, a move that, in the considered opinion of the AGI, will go a long way to off-set the cash flow problems currently being experienced by the utility providers.

With regard to VRA, GRIDCO and ECG, the country’s major power producers, transmitters and distributors, respectively the industrialists are urging their respective Boards and Managements to leave no stone unturned in unearthing all cases of illegal power connections which are rife in the country allegedly with the tacit or active connivance of some corrupt company officials.

They were also admonished to be sensitive to overburdening the law-abiding and paying public as well as micro and small enterprises with tariff increases in a difficult business environment where fraudsters and nonpayer’s seem to be having a field day.

The AGI called on UPs to be mindful of the fact that other equally aggressive and free-market economies are using energy as a competitive tool to attract investment to create jobs and wealth, while pointing out the need for them to institutionalize stakeholder meetings and work within approved plans.

The UPs need to appreciate that massive utility tariff adjustments act as a business disincentive and, above all, a deterrent to existing and potential investors.

They are also admonished to give serious consideration to adopting the local-content policy of contracting or outsourcing the manufacture of some equipment such as transformers, meters, cables and allied components parts to Ghanaian based companies recognised for their technical know-how and international accepted quality assurance practices.

The AGI states that, as a credible voice of industry, it looks forward to working with the VRA, ECG and GRIDCO with the Ghana Chamber of Mines (GCM), and the Ghana National Chamber of Commerce and Industry (GNCCI) and, in the spirit of public-private partnership, with Government to ensure that workable tariff adjustment mechanism will see the light of day in pursuance of the ”Better Ghana Agenda.”

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