GEO urges PURC to act to save private companies in particular

The Ghana Employers’ Association has urged the Utilities Regulatory Commission (PURC) to reject any proposal from utility companies requiring tariff increases, as such a move could lead to business bankruptcy.

According to the GEA, a study conducted last year – sampling more than 140 companies from all industries – found that 62 percent of employers had completely disrupted their business operations.

More than 75% of employers postponed their investment decisions, while 64% of employers responded that demand for their products had fallen below normal levels due to the effect of the COVID-19 pandemic on their customers .

For them, the situation of employers has not changed and, in some cases, has worsened, so that any increase in the prices of public services would be doomed to failure for their activities.

In a statement signed by CEO Alex Frimpong, the GEA emphatically stated, “In order to help businesses recover quickly from the vagaries of the COVID-19 pandemic and facilitate effective implementation of the overall strategy The Government’s Economic Recovery, Dubbed the Ghana CARES program, the Ghana Employers’ Association (GEA) would like to urge the Utilities Regulatory Commission (PURC) to maintain the current utility tariff regime for electricity and l ‘water. “

The statement went on to say: “GEA observed that proposals have been made to the PURC to revise upwards the current levels of electricity and water tariffs to enable actors in the energy sector, in particular. those in the distribution value chain, to become more efficient operations ”.

GEA has argued that while it recognizes that adjusting tariffs can help utility companies raise more revenue to facilitate their operations, now is not the time for such policy guidance.

“An upward revision of tariffs will only prolong the recovery period of businesses and make them uncompetitive with the general consequence of long periods of unemployment. It’s worth remembering that the pandemic outbreak has really taken its toll on businesses, requiring a lot of work and sacrifice to help them rebuild themselves. “

The association believed that the general benefits of keeping utility tariffs at their current levels in the country will far outweigh the revenues accruing to utility companies from an upward tariff adjustment.

Regarding revenue generation, the GEA said it is confident that if new and effective strategies are implemented by utility companies, sufficient revenues could be recovered through financial gaps as well as production, transmission and distribution losses that challenge the energy sector.

He mentioned that although utility tariffs have not been revised since October 2019, the country still remains relatively high, for example on the price index of electricity tariffs in West Africa.

GEA argued that revising utility tariffs in the current economic climate will not only render the government’s economic stimulus strategy ineffective, but will also place Ghanaian employers in an uncompetitive position in the international market in general and in the West African sub-region in particular.

“In addition, the need for Ghanaian businesses to have a competitive impetus within the African Continental Free Trade Area (AfCFTA) also requires that the prices of critical, delicate and sensitive inputs such as utility tariffs be well managed to enable Ghana to fully exploit the benefits of this historic free trade agreement, ”the statement said.

The GEA praised the utility companies for the upgrades underway to better serve customers, even though this has resulted in intermittent blackouts.

“GEA is aware that the ongoing power outages in the country are due to unavoidable maintenance and repair work on a number of critical plants and equipment. It is a welcome development.

However, we urge the Commission to involve at all times all stakeholders in the production, transport and distribution value chain, as well as consumers, in order to keep Ghanaians and businesses informed in a systematic way. on all power outage matters to ensure smooth business planning. »Concludes the press release.