Government is partly responsible for unprecedented proposed tariffs – Dr Manteaw
A policy analyst and co-chair of the Ghana Extractive Industry Transparency Initiative, Dr. Steve Manteaw, has accused government of having a hand in the high increment in tariffs, proposed by utility service providers.
According to him, the failure of government to address the challenges in the economy, is what has compelled the utility service providers to table the said proposals.
“The demands that the utility companies are making are generally reflective of the challenges within the larger macro economic sphere, such as inflation, that is spiraling out of control.
A Cedi that cannot stand its ground against major trading currencies. Interest rates that have fallen behind inflation. And for these reasons, government bares part of the responsibility for the unprecedented tariff increases that the companies are asking”, he explained.
He added that, “If government were to manage the macro economy very well, and if our Cedi were to hold its ground against the major trading currencies, perhaps the extent of the demand wouldn’t be as astronomical as it is now”.
Dr. Manteaw made these remarks, while contributing to discussions on Newsfile on Saturday, in relation to the proposed tariff increments by utility service providers in the country.
He however intimated that the proposed increments can also be blamed on ‘the supply chain disruptions arising out of the COVID-19 effects and the general price increases globally’.
Currently, the Electricity Company of Ghana is demanding a 148% increase in tariff.
A proposal from the power distributor, submitted to the Public Utilities Regulatory Commission (PURC), wants the adjustment to cover the period 2019 and 2022.
It also proposed an average increase of 7.6% in tariff over the next four years to cover Distribution Service Charges (DSC).
On its part, the Ghana Water Company Limited (GWCL) is also demanding a 334% increase in tariff. The GWCL in its proposal said over the years, the approved tariffs have not been fully cost-reflective.
These proposals have generated widespread conversation, with many Ghanaians expressing their disapproval of same.
Following the concerns raised, GWCL stated that should the general public refuse to support the company’s drive to get customers to pay realistic tariffs, it may have to halt operations in the future.
Amidst these controversies, the Public Utilities Regulatory Commission (PURC) is expected to announce new utility tariffs by July 1, 2022.
According to the Acting Director of Research and Corporate Affairs at PURC, the Commission has been interrogating the companies since receiving the proposals to ascertain their need for tariff increment.
Speaking on Newsfile on Saturday, Dr. Eric Obutey stated that “for now, we are about finishing the stakeholder consultations. In the coming weeks, we will be meeting with the Parliamentary Select Committee on Mines and Energy and we will be meeting with the TUC as well”.
Aside from these entities, the PURC, Dr. Obutey added, will also have a hearing where the general public would be encouraged to voice their concerns on the increments that ECG and GWCL are proposing.
“The Commission is looking at the first of July to come up with adjustment in tariffs. So between now and the middle of June, we will be having these stakeholder engagements and public hearings and we will do all the number crunching and come up with a tariff”, Dr. Obutey said.