Energy Minister advocates for change in current tariff structure to boost industrialisation
Minister for Energy, Dr. Matthew Opoku Prempeh, has advocated for a change in the current structure of Ghana’s tariff structure, according to a Joy Business report.
He believes the change could help improve the country’s industrialisation efforts, make businesses more competitive, address high cost of living and improve the economy.
Addressing participants during consultative engagements with the Public Utilities Regulatory Commission (PURC), Dr. Opoku Prempeh said the end-user tariff for commercial and industrial sectors of the economy are relatively higher.
He added this is punitive compared to tariffs in other developing countries such as South Africa, South East Asia and Cote D’Ivoire.
The Energy Minister explained that at the sub-regional level, a comparison of electricity tariffs with neighbouring West African countries indicates that, the cost of power in Ghana remains relatively expensive, particularly for industry.
He pointed out that this has adversely affected Ghana’s competitiveness given that cheaper power is a key determinant in attracting both domestic and Foreign Direct Investment (FDI) inflows.
The minister also outlined that the increasing cost tariffs could impact Ghana attaining the Sustainable Development Goals (SDG) 7 and 3 as well as Ghana’s efforts to take advantage of the African Continental Free Trade Area (AfCFTA).
Dr. Opoku Prempeh further charged the PURC to critically scrutinise expenditure of utilities in order to minimize losses and wastage in the system among other things.
He also tasked the utilities regulator [PURC] to put together a band tariff classification to aid in energy conservation and replace the current tariff band with a single one meant for each class of customers.
In his concluding remarks, the Energy Minster called on the PURC to consider granting special tariff for primary and second cycle schools, churches, mosques, agriculture, and agriculture-processing industries in the country.
Meanwhile, the Electricity Company of Ghana has proposed that its tariffs be increased by 148 percent for 2022 with 7.6 percent average adjustments between the periods of 2023 to 2026.
The Ghana Water Company Limited (GWCL) on its part, proposed a 334 percent increment in tariff but both proposals have been met with widespread backlash from the public.
But the PURC has said it is yet to analyze and make decisions with ongoing consultations with the regulated public utilities, leading to the determination of a multi-year tariff.