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Dry Christmas Increased utility tariffs to affect Christmas celebrations

The analyst points out that most businesses may find it a lot more difficult paying the usual Christmas bonuses of their employees.

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Reactions and agitations about the current increment in the prices of utilities are still ongoin.

The latest concern is how December's christmas spending, especially for businesses will be affected by the imminent increment in cost of production, come January 2016.

The Public Utility Regulatory Commission (PURC) last week approved a hike in water and electricity tariffs by a total of more than 120 percent.

The price of water went up by 59.2% and electricity went up by 67.2%.

Financial consultant, Charles Mensah believes expenditure on the festive season's rituals like the purchase of gifts for customers and certain rewards will be curtailed because of the imminent increase in the cost of utilities and invariably the cost of production.

In an interview on Joy Fm's Business Trends, the analyst pointed out that most businesses may find it a lot more difficult paying the usual Christmas bonuses of their employees.

Read More: > Statement Suspend implementation of new utility tariffs - TUC

According to the financial analysts, employees are most likely the ones to bear the brunt of the extra cost because consumers are already burdened with increased prices of goods and services and may not be in a position to bear the additional increament.

Perspective of Industry

Meanwhile, Captains of industry have described the recent tariff increments as ill-timed and insensitive to the plight of the people.

They believe that such increments would make the manufacturing sector uncompetitive and drive away investors, while those already operating may consider relocation.

Speaking in separate interviews with the Daily Graphic in Accra yesterday, they called on the utility companies to address their inefficiencies by stepping up their collection rates and plugging all the loopholes in the system instead of constantly relying on increments.

According to them, the economic situation was not conducive enough for such increases and, therefore, called for a reverse of the decision until the time was ripe.

Chamber of Commerce

The President of the Ghana Chamber of Commerce, Mr Seth Adjei-Baah, said the increment came as a surprise at the time when industries were complaining about the high cost of doing business.

Read More: > Necessary Utility tariff increment 'too small' - Wereko-Brobby

He said for some time now, the private sector had really been under pressure to keep business going, amidst the high cost of fuel and inconsistent energy supply, compelling everyone to go for standby generators in order to stay in business.

Mr Adjei-Baah said it was particularly surprising that exactly two weeks ago when President John Dramani Mahama launched the patronage of made-in-Ghana goods campaign, the private sector, which was expected to champion the call had been met with such high tariff increases.

He said such increases would not only kill the manufacturing industries, which were a major source of employment, but also promote the importation of foreign products.

Appeal to President

Mr Adjei-Baah, therefore, appealed to the President “to intervene to make sure that we reverse the situation until we are able to stabilise things. As of now, things are not the best to warrant such increments.”

He said it was a fact that anytime there was tariff increment, it affected everything, adding that the utility companies had destroyed the Christmas festive season, considering the fact that all Ghanaians, irrespective of their religious orientation enjoyed Christmas.

AGI

The President of the Association of the Ghana Industries (AGI), Mr James Asare Adjei, said the decision was ill-timed, coming at a time when industry was really going through serious challenges.

He wondered why the Public Utilities Regulatory Commission (PURC) should be increasing tariffs when the energy crisis itself had not improved.

“The question is why do we increase tariffs when we don’t even have the power? Why should we pay more for a commodity that we don’t have?”

Read More: > Tariffs Ghanaians react to PURC utility prices spike on Twitter

Mr Adjei believed that such increases would make the cost of doing business very high, “making Ghana uncompetitive in the sub-region.”

Any demonstration?

On whether to join others to demonstrate if the PURC insisted on pushing through the tariffs, he said the AGI would not participate in such demonstrations, because “as captains of industry, we have suffered enough by way of time lost and the fact that we are not able to produce to full capacity.

“We don’t think this is the appropriate time for us to lay down our tools or close our factories to demonstrate. We will continue to use our advocacy medium to engage all the relevant institutions to get the problem addressed. AGI is not in a position to join any demonstration of any sort,” he added.

He called for a total review of the structure of electricity and water pricing such that industry would not continue to subsidise residential power users.

GUTA

For his part, the President of the Ghana Union Traders Association (GUTA), Mr George Ofori, believed that the decision by the PURC was a misplaced priority, explaining that Ghana was in a global village and such actions could scare away investors.

He said no investor would want to invest in a country whose currency was not stable and had unreliable power and water, adding that “Ghana is part of the global village and every country in the world now is looking for investors.”

Touching on the unreliability of power, he said, “An item is bargained for when it is there. In our situation, the energy is not there, so what are we bargaining for or increasing its price?”

 

 

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