The Food and Beverages Association of Ghana (FABAG) has voiced its strong opposition to the ongoing increases in electricity tariffs in Ghana. The association warned that these hikes are actively hindering industrial development and adding extra pressure on manufacturers already struggling.
This opposition follows a recent decision by the Public Utilities Regulatory Commission (PURC) to increase electricity tariffs by 3.49 per cent for all consumer groups. Water tariffs also saw a 0.85 per cent rise, both becoming effective from July 1, 2026. Macroeconomic factors like inflation, exchange rates, fuel prices, and changes in electricity generation influenced these adjustments.
These developments occur within a broader context where Ghana's industrial sector frequently identifies energy costs as a significant barrier. High electricity prices can reduce competitiveness and deter new investments. This situation challenges Ghana's goal of boosting economic growth and creating jobs through industrialisation.
Rev. John Awuni, FABAG’s Executive Chairman, stated that the continuous tariff increases are a “complete disincentive for industrial development.” He argued that Ghana's electricity sector strategy relies too much on tariff hikes. He believes this avoids tackling the core inefficiencies within utility providers.
Awuni noted that rising utility charges make it harder for businesses to grow, stay competitive, and create employment. He also said tariff reviews offer only temporary financial relief to utility providers. They do little to improve efficiency across the electricity value chain. He stated, “Continuous adjustments of electricity tariffs will never make the utility sector efficient.”
The FABAG Chairman also challenged the idea that low electricity prices are the main problem in Ghana’s power sector. He insisted that management weaknesses, poor revenue collection, and distribution issues are the real culprits. Ghana already has some of the highest electricity costs in the West African sub-region.
Further increases could make local industries less competitive and discourage foreign investment. Awuni urged policymakers to implement innovative and lasting reforms. These reforms should focus on reducing losses and improving operational performance.
He described constant tariff adjustments as a “very lazy way of dealing with the inefficiency of the power sector.” FABAG warns that unless bold solutions address the sector's fundamental problems, Ghana risks losing investor confidence. It also risks limiting the growth of its productive industries.
The current policy trajectory could weaken industrial output and hinder investment. This directly threatens Ghana’s broader industrialisation agenda. Policymakers are currently working to boost economic growth and create jobs, making this a critical concern.