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AGI unhappy with level of tariffs increment for beverage sector; warns of collapse of industries

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The Association of Ghana Industries (AGI) has registered its dissatisfaction at the level of increment in utility tariffs for the beverage sector under industry.

It has also rejected the last major water tariff review in August 2022.

In a statement signed by its Chief Executive Officer, Seth Twum Akwaboah, the AGI said it noticed the principle of equity was largely missing in the major tariff review conducted in August last year for water, where a particular customer category was being asked to bear a 316% increment in a single tariff review.

“We do appreciate the changes in the key determinants in tariff fixing and therefore reasonable changes in tariff do not come as a surprise. We, however, notice the principle of equity was largely missing in the major tariff review conducted in August last year for water, where a particular customer category was being asked to bear a 316% increment in a single tariff review”.

“Indeed, our beverage companies under industry have always belonged to the industry category of water users. Surprisingly, the last major tariff review in August 2022 saw an introduction of a new end-user category, Commercial Bottled Water and Drinks, quite alien to the PURC gazette.”, it explained.

“Indeed, the increment for this new consumer category alone was 316%, over and above the 21% average increment reported for water. This is the new category our beverage companies within Industry are being unfairly re-assigned. We acknowledge the water tariff reduction from the 316% (¢45.94/1000 litres) to 172% (¢30.00/1000 litres) subsequent to our meetings with the PURC but this is still unbearable”, it added.  

Furthermore, it said, it do not think the creation of a new consumer category addresses the challenges in the water distribution system, adding, such astronomical tariff increment in a single revision is retrogressive and shows no empathy for Ghana’s ailing Industrial sector.

“We all need to wake up to the looming collapse of our local industries which hold the key to job creation and our economic recovery”.

The AGI reiterated that a tariff increment of 316% and subsequently 172% for its beverage sector under industry will have dire consequences for industry and the Ghana Water Company (GWCo).

Again, the AGI said it noticed a 48% increment in water tariffs for Industry effective this February, which is a significant deviation from the 8% average increment as announced.

“Within a period of less than six months, electricity tariffs have also shot up significantly on two occasions, 26.6% in September 2022 and 29.9% for this quarter, totalling a whopping 56.5%”.

“Industries have been under pressure from an unstable business environment. Hoping to see signs of recovery this year, the situation is further worsened by this utility tariff increment, inflation at 54.1%, VAT at 21.9%, fuel prices inching up, and threats of excise duty increments, which pose a serious threat to employment prospects and survival of businesses”, it stressed.

AGI urges government to stem macro-economic instability

AGI urged the government to help stem the tide of the macro-economic instability, which is a major trigger for some of the changes in tariffs level and price hikes.

It also called on the PURC to maintain its beverage sector companies in their industry category which has seen a 48% increment in water tariff, saying, “We believe Industries are a high revenue customer for Ghana Water Company and deserve equity in the water pricing we see”.

“AGI is looking forward to further engagement with the PURC and the Utility Service Providers in the coming days”, it concluded.

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