Business strategist and financial analyst Dr Daniel Armateye Anim has stated that the recent increases in electricity and water tariffs will lead to a rise in the prices of goods and services on the market.
In an exclusive interview with GhanaWeb Business, he mentioned that the upward adjustment in item prices could exacerbate inflationary pressures.
He explained that this would affect the cost of living as business owners are likely to pass on the additional costs to customers in an effort to share the burden.
“As much as the increases in electricity tariffs and other tariffs aim to reduce the shortfall within the energy sector, as rightly stated by the IMF, the ripple effect is that it could lead to increases in the cost of items, it could lead to inflationary pressures, and may, in the short term, affect the cost of living within the domestic economy,” Dr. Anim commented.
The financial analyst urged the government to implement mitigation policies to alleviate the cost of living for Ghanaians.
“I only hope that with the increases in tariffs like electricity and water now in effect, the government will introduce mitigation policies to minimise the cost of living so that citizens don’t suffer too much,” he added.
His remarks come after the Public Utilities Regulatory Commission (PURC) recently announced an upward adjustment in the average end-user tariff for electricity by 14.75% and a 4.02% increase in water tariffs across all consumer categories.
According to PURC, these adjustments, effective May 3, 2025, are part of its quarterly tariff review mechanism as outlined in its rate-setting guidelines for the periodic adjustment of natural gas, electricity, and water tariffs.
The Commission noted that the adjustments were influenced by factors such as the exchange rate, inflation, electricity generation mix, and the cost of fuel (mainly natural gas) used in power production.
The move, the Commission explained, is intended to prevent both over-recovery and under-recovery of revenues.
Additionally, the International Monetary Fund (IMF) has stated that the hike in electricity and other utility tariffs is aimed at addressing the shortfall in the energy sector.
The Bretton Woods institution further clarified that the tariff adjustments are intended to prevent the accumulation of new arrears.
SA/MA
Watch the latest edition of BizTech below:
Click here to follow the GhanaWeb Business WhatsApp channel