The Ghana Union of Traders Association (GUTA) has raised concerns over the recent upward adjustment in water and electricity tariffs, questioning the justifications provided and stressing that the increment will further reduce the purchasing power of consumers.
According to GUTA, the new tariffs will only serve to worsen the already challenging cost of living for Ghanaians.
On Saturday, September 28, the Public Utilities Regulatory Commission (PURC) announced an increase of 3.02% in electricity tariffs and a 1.86% rise in water tariffs, both set to take effect on October 1, 2024. The PURC attributed this adjustment to exchange rate fluctuations, inflation, and rising gas prices, stating that these factors made it necessary to revise the rates for the third quarter of the year.
However, GUTA has expressed strong opposition to these justifications, arguing that the reasons provided are insufficient and do not take into account the already struggling economy. Joseph Paddy, the Public Relations Officer for GUTA, voiced the association’s dissatisfaction with the tariff increase, noting that it will exacerbate the economic hardship Ghanaians are already experiencing.
“The new tariff is not justifiable,” Mr. Paddy stated. “That [the new tariff] is a result of increasing gas prices and also interest rates and exchange rates going up. Who caused the exchange rate to go up? And that is what the fiscal committee has been complaining about, the instability in the system.”
His remarks highlight GUTA’s belief that the government has failed to address the root causes of economic instability, such as exchange rate fluctuations and inflation, which are now being used as reasons for the tariff hikes. The association feels that these challenges should have been tackled at the source rather than passing the burden onto consumers, many of whom are already struggling to make ends meet.
Mr. Paddy further emphasized the negative impact these new tariffs will have on the cost of living in the country. He noted that Ghanaians are already finding it difficult to cope with the high cost of living, and the timing of the increase only adds to their woes.
“So they should come again otherwise, it is going to make the cost of living in the country extremely difficult for Ghanaians and very high,” he said. “Already, Ghanaians are complaining that the cost of living is extremely high in the country. And then coupled with that, we are bringing this increase at this critical moment. Even the timing is also a challenge.”
GUTA’s concerns reflect the broader frustrations of many Ghanaians who are grappling with rising prices of goods and services. The cost of essential items such as food, fuel, and housing has continued to climb, putting pressure on household budgets and leaving many families in a precarious financial position. With the new tariffs set to take effect, there is a growing fear that the situation will only get worse.
The timing of the increase has also been called into question, as many believe that the decision to raise tariffs at this point in time is ill-considered. With the economy still reeling from the effects of inflation and the depreciation of the cedi, consumers are finding it increasingly difficult to maintain their purchasing power. The latest tariff adjustment threatens to further erode their ability to afford basic necessities, including water and electricity.
Critics of the PURC’s decision argue that the government should focus on stabilizing the economy and controlling inflation before implementing any additional financial burdens on the public. By doing so, they believe that the root causes of the current economic instability could be addressed, thereby preventing the need for such tariff increases in the future.
Despite these concerns, the PURC has maintained that the increase is necessary to ensure the sustainability of utility services in the country. They have pointed to the rising costs of production, particularly in the energy sector, where gas prices have significantly increased. These factors, combined with the challenges posed by the exchange rate, have made it difficult for utility providers to maintain current tariff levels without compromising service delivery.
While GUTA acknowledges the need to ensure that utility services remain operational, the association insists that the government must do more to shield consumers from the effects of these price hikes. According to Mr. Paddy, the government should consider alternative measures to manage the rising costs without placing the entire burden on the public.
As the tariff increase approaches, many Ghanaians are left wondering how they will manage the additional financial strain. For those living on fixed incomes or in vulnerable economic situations, the prospect of higher utility bills is a source of significant anxiety. With the cost of living already at an all-time high, any further increase in expenses could push some households to the brink of financial collapse.
In the face of these challenges, GUTA is urging the government to revisit the decision and explore other options that could provide relief to consumers. The association believes that by addressing the underlying issues of inflation, exchange rate instability, and rising production costs, the government could create a more stable economic environment, one in which such drastic tariff increases are not necessary.
As it stands, the new tariffs are set to take effect on October 1, and unless there is a change in policy, Ghanaians will have to brace themselves for yet another increase in the cost of living. For many, the hope is that the government will heed the call of GUTA and other concerned groups, and take action to alleviate the burden on consumers before it is too late.
