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Business News of Friday, 15 May 2020

Source: Business 24

Gov’t to pay more for water subsidy

The government’s allocation of GH¢200m to pay the water bills of households for April-June is likely to be inadequate, since the cost of the subsidy, according to sources at the Ghana Water Company (GWCL), is expected to hit GH¢420m due to increased water consumption.

Absorbing the water bills of Ghana’s 30m population for three months (April-June) represents a heavy responsibility the government has taken on in order to cushion the economic impact of the coronavirus pandemic, with an initial GH¢200m allocated for the expenditure.

GWCL’s total billings for all customers average GH¢95m per month, but given the rise in water consumption as a result of the pandemic and the subsidy itself, the cost is likely to be more during the subsidy period, sources at GWCL revealed.

The government’s allocation of GH¢200m to pay the water bills of households for April-June is likely to be inadequate, since the cost of the subsidy, according to sources at the Ghana Water Company (GWCL), is expected to hit GH¢420m due to increased water consumption.

Absorbing the water bills of Ghana’s 30m population for three months (April-June) represents a heavy responsibility the government has taken on in order to cushion the economic impact of the coronavirus pandemic, with an initial GH¢200m allocated for the expenditure.

GWCL’s total billings for all customers average GH¢95m per month, but given the rise in water consumption as a result of the pandemic and the subsidy itself, the cost is likely to be more during the subsidy period, sources at GWCL revealed.

The projected increase is based on the fact that people are using more water for cleaning to limit the spread of COVID-19 and also because consumption is free for this period.

Moreover, GWCL has procured about 700 water tanks and engaged the services of tankers to supply water to communities. Compensation for such vendors is currently being discussed, which would contribute to the cost of the subsidy.

The President, Nana Akufo-Addo, in his fifth address to the nation on April 5 since the coronavirus outbreak, announced that the public would enjoy free water supply from the GWCL for the months of April, May and June as part of interventions to help stop the spread of the coronavirus disease and alleviate its economic impact.

As part of precautionary measures to stop the spread, health experts have advised the washing of hands with clean water under running water for at least 20 seconds. This requires access to uninterrupted water supply, partly motivating the government’s intervention.

GWCL has an estimated 550,654 customers in urban areas. This number represents 77 percent coverage of urban Ghana. The company on average produces 192m gallons of water per day, which is 57m less than the daily demand of 249m gallons.

Selling water is illegal

In the wake of the subsidy, the company has cautioned vendors, including landlords and landladies, to desist from selling water to consumers and also urged opinion leaders and assemblymen to help with the education to prevent vendors from engaging in what the company describes as an “illegal” venture.

As at December last year, government’s indebtedness to GWCL stood at GH¢137m, reflecting mainly debts of Ministries, Departments and Agencies (MDAs).

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