Ghanaian manufacturing companies pay 18 to 23 cents per kilowatt-hour for electricity, according to Mark Badu Aboagye, CEO of the Ghana Chamber of Commerce and Industry. This rate is significantly higher than the under 5 cents per kilowatt-hour needed for sustainable international competitiveness. The elevated power costs make it difficult for local businesses to compete with manufacturers from other regions, including China.
This critical issue emerged during a Channel One TV discussion focused on Ghana's strategy to maximize benefits from the African Continental Free Trade Area (AfCFTA). Journalism students from the University of Media, Arts and Communication (UniMAC) joined the live audience. Experts on the panel also pointed to the high cost of accessing funds from banks as another major hurdle for businesses. These financial barriers prevent companies from expanding and participating effectively in cross-border trade.
Ghana’s economic narrative has consistently grappled with high input costs for industries. This trend affects job creation and the nation's overall industrialization agenda. High electricity tariffs for businesses have been a long-standing concern, impacting everything from small and medium-sized enterprises (SMEs) to large manufacturing plants. Data from the Public Utilities Regulatory Commission (PURC) often reflects these significant cost burdens. Addressing these structural issues is crucial for Ghana to fully realize its economic potential within the AfCFTA.
Mark Badu Aboagye emphasized the unequal footing Ghanaian manufacturers face. He stated, "As I speak to you today, the cost of power in Ghana for a manufacturing company is from 18 to 23 cents per kilowatt hour, but for sustainability and competitiveness, you need less than 5 cents per kilowatt hour." He added that despite banks claiming funds are available, the cost of access remains prohibitive. Africa development expert Dr. Fareed Arthur agreed, noting that banks are often reluctant to take risks, hindering cross-border business. Benjamin Asiam, Acting National AfCFTA Coordinator, highlighted government efforts to sponsor trade expeditions for SMEs to integrate into new African markets.
The government and financial institutions must take immediate action to lower electricity costs and improve access to affordable financing for businesses. Without these changes, Ghanaian manufacturers will continue to struggle for competitiveness within the AfCFTA. Policymakers should focus on direct subsidies or incentive programs for industrial energy consumption. Banks must develop innovative financial products specifically tailored for cross-border trade. This proactive approach is essential for Ghana to capitalize on the vast opportunities presented by the world's largest free trade area.
The AfCFTA unites 55 African Union member states into a single market of 1.4 billion people. The combined Gross Domestic Product (GDP) exceeds $3 trillion. Its primary goals include boosting intra-African trade and enhancing the continent's global economic standing. Discussions like the Channel One TV program are vital for educating local businesses about AfCFTA's opportunities and practical implications. The government's 24-Hour Economy Authority aims to prioritize agribusiness and the power sector to contribute to Ghana's economic growth.