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Opinions of Wednesday, 29 September 2010

Columnist: Baafi, Alex Bossman

The Utility Tariff Increases: What Is The Official Position Now?

By Alex Bossman Baafi

Just some few months ago when the Public Utility Regulatory Commission (PURC) announced 89% and 36% increase in electricity and water tariff respectively, the public outcry that greeted the announcement calumniated in the vice president’s intervening to make sure sanity prevailed. The veep’s intervention brought a downward review but was still not the best because the Association Ghana Investors (AGI) and the Trade Union Congress (TUC) put up cases, pointing lack of consultations on the part of PURC with stakeholders before arriving at the increases.

On the part of AGI, the increases were so astronomical that it will increase considerably the cost of production and consequently could invariably lead to job loses, decrease in corporate profits and hence decrease in production and investments. The TUC observed that the Mills government has resulted to excessive taxation drive to the detriment of the workforce of this country. For example, on assuming office since January, 2009, fuel prices have gone up drastically by 45%. Tariffs in food imports including rice and poultry products were increased over 25%. Roads and Bridge Tolls have skyrocketed by an increase averaging more than 1,000%. Fruits and Alcoholic beverages including the local gin, ‘Akpeteshie’ had seen 20% hikes in Tax among others. They therefore opined that the 89% and 36% of electricity and water prices increase respectively will undoubtedly increase the hardships of workers in particular and most of the good people of this country in general and therefore pleaded for the suspension of the utility tariffs increase until stakeholders meet to mutually brainstorm to agree on common numbers.

In all these discussions, the general public was informed duly of all that was going on and appreciated it. All of a sudden, consumers are made to pay high bills without been informed about the outcome of the deliberations and the official position on the numbers of the increase in these electricity and water by the PURC. For example, I went to buy GH¢50.00 prepaid electricity, on the receipt, I was credited GH¢37.48. It was shown on the receipt “difference in tariff 1 GH¢12.52” totalling GH¢50.00. I paid GHc50.00 and was given GHc37.48 credit of electricity which in my lay man’s calculation works up to 25.04% tax. This is the situation in which we find ourselves. Prior to this situation described above, I used to consume on average GHc50.00 per month before PURC first announced the heart-breaking increases that culminated to the public outcry and we were made to believe that the increases were suspended.

My concern is that, an increase in utility tariff such as this, is a national security issue which bothers on matters of life and death and therefore it would be fair to come open and let people know the official position in terms of the numbers so that consumers can make income substitution by reallocating their resources in rationalising their budget. Currently many high profile companies in Tema have started laying-off a lot of their workers and by the close of the years many people will become jobless. Is that the best we can do as a nation? When we have to take such critical decisions, we must educate our people to appreciate and understand the need for such decisions instead of arrogantly and insensitively taken the good people of this country for granted.