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Mixed reactions greet new utility tariffs

BY: Graphic Reporters
Mixed reactions greet new utility tariffs

The announcement by the Public Utilities Regulatory Commission (PURC) that tariffs are to go up effective February 1, is being kicked against by a section of the general public who say it will worsen an already difficult situation as, generally, the prices of goods and services have gone up.

People expressed worry that the proposed increment would affect their budget which had already been impacted by an increment in VAT and other taxes.

A section of the public the Daily Graphic spoke to across the country, made up of small business owners and traders, expressed reservations about the latest increases in utility tariffs, saying it would impact them negatively as the new tariffs would invariably affect their budget.

“Schools just reopened and many of us have had to spend our resources on textbooks, school fees and other academic-related challenges. Cost of food remains very high, the new VAT has taken off and adding this tariff increment to our budget means we will be suffocating financially.”

They have, therefore, called on the government to as a matter of urgency consider the plight of most Ghanaians and intervene by directing the PURC to rescind its decision.

Background

Last Monday, the PURC announced plans to increase electricity and water tariffs on February 1, 2023.

The new tariffs will push electricity up by 29.96 per cent for all customers and water by 8.3 per cent.

The increment was occasioned by the unstable exchange rate, rising inflation, generation mix and weighted average cost of natural gas.

The commission approved varying rate adjustments including some reductions for selected industrial and commercial consumers as part of the ongoing restructuring of the existing water rate structure.

Businesses suffering

In Accra, Jemima Okang Addae and Linda Sah report that a beautician, Kwesi Mensah, said an increase in utilities was further going to increase the cost of living of the ordinary Ghanaian.

He explained that the general increase in goods and services, depreciation of the cedi against the dollar, Domestic Debt Exchange and an increase in utilities would be too much of an economic burden for the Ghanaian people to bear at once.

“Things are tough and we are struggling to barely survive. This new tariff will increase the economic burden. This will be unbearable.

A trader at the Circle Market, Auntie Jemima, also said: “The cost of everything has gone up and it seems government wants to just add to our misery. Already VAT is up, prices of food remain high and now power and water too? If they increase the electricity bill, I will use “bobo” to cater for my daily needs. Those who need the light should go and pay for it,” she added.

An employee at an eatery, Kwabena Johnson, said he was worried that the increment would affect people’s purchasing power and by extension, his business as people may want to save money on essentials.

“Our businesses have suffered these past two years. The government should have compassion on us, considering the inflation rate and price hikes in goods and services. We are still unable to pay for some bills,” he said.

A communications centre operator, Ablade Mensah, also questioned the timing of the PURC decision as the last increment came into effect only last September and wondered if the commission had assessed the impact of the increment on delivery of quality service which it always used as an excuse.

“The PURC always comes up with ways to increase tariffs. At the end of the day, you do not see the services. Water is unavailable in some areas. Many people have challenges purchasing power and nothing has been done about it, Why increase the tariffs?” he asked.

Passing on cost

For Asheley Ashitey, a cold store operator at Tema Manhean, the increment in electricity tariffs would affect the price of frozen meat products, writes Benjamin Xornam Glover from Tema.

She said the existing rates were already impacting negatively on her business and having to pay more for the service would further compound the situation.

“I am already paying too much for electricity. I spend more than GH¢500 every two weeks on electricity and this upward adjustment will worsen matters. I will have no choice but to pass it on to the consumer," she said.

Another cold store operator, Agnes Adjei, said the business was facing some challenges with the new VAT rates and having to add the new cost to their business was not welcomed.

Michael Antwi also bemoaned the hike in water tariffs, stressing that it was as though the government wanted to recoup all the money from the free water Ghanaians enjoyed in the heat of the COVID-19 pandemic.

Mixed reactions in Bolga

Whereas some welcomed the increment as it would better position the beneficiary utility companies to deliver on their mandate, others were of the view that the increase would have a negative toll on their meagre wages and salaries, reports Gilbert Mawuli Agbey.

A nurse, Patricia Anafo, said: " It is very surprising that the government increased salaries of public sector workers a week ago and soon after, utility tariffs are also being increased. It seems leaders do not want the ordinary Ghanaian to enjoy any relief at all," she opined.

A teacher, Akoose Atubila Daniel, said with the new increase in tariffs, government should anticipate the payment of another Cost of Living Allowance (COLA) to public workers.

However, a businessman, Inusah Abdellah, who welcomed the increment, urged the utility companies to justify it by improving their services to serve consumers better.

"The public is always not happy when tariffs are increased and that the essential thing is for the utility companies to improve the services they render," he said.

Tamale

From Tamale, Mohammed Fugu reports that residents have kicked against the new tariffs because it will worsen the already difficult living condition and over-burden them due to the current economic situation.

Iddrisu Abdallah said: " As an unemployed graduate, it won't be easy for me to pay because I have nothing to survive on, I am very worried and wish the government will do something about it".

Another resident, Hadija Gafaru, who sells chilled bottled and sachet water, said the tariff increment would affect her business because she would have to pay more for electricity.

New tariffs too early

In the Sunyani Municipality, some residents asked the PURC to show some consideration towards the plight of most Ghanaians and shelve the decision to increase tariffs, Biiya Mukusah Ali writes from Sunyani.

They said many people were still trying to adjust to the last increment which came into effect last September and wondered why tariff increment always came up anytime salary increment was announced.

Kwame Adinkra, told the Daily Graphic that he was shocked when he heard that PURC had increased utility tariffs.

“I’m still recovering from last year's increment of the tariffs and little did I know that there will be another increment.

“I have observed that anytime the government increased salaries of workers or offered any remuneration, utility tariffs were also increased.

“After announcing 30 per cent increment of salaries for government workers, PURC quickly announced increment in tariffs just like what happened when the Cost of Living Allowance (COLA) was announced last year. Why is it so?” he asked.

Appiah Kubireal Godwin, a trader, questioned the basis on which the PURC considered an increase in tariffs.

He said it was too early for the PURC to introduce new tariffs this year, explaining that just last year in September, the PURC increased the tariffs and he could not understand why it had be done again within six months.

Shelve decision

From Koforidua, some residents also called on the PURC to shelve the proposed increment to help prevent people from living on the edge, reports Haruna Yussif Wunpini.

They said with all the issues going on with the economic challenges and government’s planned Domestic Debt Exchange Programme (DDEP), it would be suicidal for tariffs to go up further.

A teacher, Mohammed Awal, told the Daily Graphic that it was not proper for the PURC to announce an increase in utility tariffs.

“People have their funds locked up and we are not sure what is going to happen with the proposed domestic debt exchange programme and many people are all living on the edge. This plan to increase tariffs could make people snap. I don’t think this is the time to increase tariffs,” Mr Awal said.

Rose Botwe, who sells fried yam and sachet water for a living, said the new increment would erode her profit and make life unbearable for her.

She thus appealed to the government to immediately intervene to stop the increment since that could impoverish consumers more.

"Indeed cost of living in Koforidua is high and therefore any increment of electricity and water tariffs will make Ghanaians unable to pay for their wards’ education at the tertiary level", Madam Rose Botwe stated.

Wrong timing

From Kumasi, Kwadwo Baffoe Donkor reports that the residents believed that the timing was not right, especially at a time when the whole country was going through economic challenges and believed that the least the government could do was not to exacerbate the plight of the people.

Richard Dwomoh, a civil servant, said: “The system is hot and increasing tariffs will exacerbate the conditions badly for the citizenry.

“We are suffering and many of us were not expecting an upward adjustment of tariffs; almost 30 per cent of electricity. This will obviously increase illegal connections,” he lamented.

Serwaah Ama Opoku, a media practitioner, also shared similar views and said it was becoming more expensive living in Ghana especially in the city.

She said the constant increase in utility tariffs was rather increasing the gap between the rich and the poor when “we should rather be bridging that gap at this point of our development.”

She described the new tariff as giving with the right and taking with the left hand, especially coming in the wake of a new base pay which was announced early this month.

For Jemima Werebo, a branch manager of a Saving and Loans company in Kumasi, “it is just the salary increment that they want to take back. It is like giving people something with the right hand and subtly taking it back with the left. That is how I see it,” she explained.