Reform utilities, conduct full audit before any tariff hikes - FABAG

The Food and Beverages Association of Ghana (FABAG) has demanded the immediate reversal of the recent utility tariff increases, warning that the new rates will worsen Ghana’s economic challenges if long-standing structural failings within the utility sector remain unaddressed.

In a statement issued on December 8, FABAG rejected the Public Utilities Regulatory Commission’s (PURC) decision to raise electricity tariffs by 9.8% and water tariffs by 15.9%. The association described the adjustments as “unacceptable, unjustifiable, and insensitive,” given the persistent inefficiencies within the Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL).

FABAG argued that the PURC cannot justify new tariffs when ECG has yet to demonstrate “in clear and measurable terms” how it intends to resolve what the association calls a “cancer of inefficiency, financial waste, and mismanagement.” It said the Public Accounts Committee’s findings already expose the depth of ECG’s operational failures and questioned why the regulator is “sweeping this cancer under the carpet.”

According to the association, ECG—an institution created to power economic activity—has instead become a major impediment to productivity, eroding trust and draining efficiency across the economy. FABAG cited systemic corruption, high technical and commercial losses, poor service delivery, weak worker discipline, and persistent revenue shortfalls as the true sources of the sector’s decline.

Rather than holding the utilities accountable, the association said, the PURC continues to burden consumers with higher tariffs.

FABAG noted that businesses cannot be expected to shoulder the costs of what it described as incompetence within ECG and GWCL. It pointed to the stark disparity between public sector wage adjustments and utility tariff increases, saying it is “unacceptable that government increases workers’ pay by 9% but goes ahead to increase utilities by 25.7%.”

The association also raised alarm over ECG’s reported budget overrun of GH¢189.2 million without approval, demanding clarity on who authorized the expenditure. It further questioned why ECG’s procurement costs ballooned from under GH¢1 billion to over GH¢8.3 billion in 2023, calling for full disclosure of procurement processes.

FABAG highlighted ECG’s technical and commercial losses—said to exceed 30%—as among the worst on the continent, and expressed concern that there is no credible plan to reduce these losses.

The association warned that the new tariffs could push many businesses to the brink, forcing them to shut down, lay off staff, or increase prices. It said the food and beverage sector, which relies heavily on electricity and water for production, storage and distribution, will be particularly hard hit, potentially worsening food inflation and deepening the cost-of-living crisis.

FABAG criticised the lack of strong accountability measures to compel utilities to reduce waste, curb theft, and improve customer service. It said consumers should not be paying for inefficiencies, especially when ECG has repeatedly failed to publish transparent operational audits.

The association stressed that tariff hikes cannot resolve the sector’s problems, arguing that “Ghana cannot tax or tariff-increase its way out of a broken power and water sector.” Instead, it called for structural reforms focused on digitisation, accountability, revenue optimisation and loss reduction.

FABAG is demanding an immediate suspension of the tariff increases, a full operational audit of ECG and GWCL with findings made public, a credible programme to reduce system losses, strict action against internal theft and illegal connections, and a cost-recovery model anchored in efficiency rather than continuous tariff increments.

The association reaffirmed its commitment to defending the interests of industry players and consumers, insisting that Ghana deserves efficient, transparent, and reliable utility systems—not ones that survive by penalising the public.