AGI rejects 172% water tariff hike for beverage producers

The Association of Ghana Industries (AGI) has called for the immediate reversal of a 172 per cent jump in water tariff for beverage producers in the country.
The association also protested the creation of a new category of water consumers — Commercial Bottled Water and Drinks — under which beverage producers have been placed.

The category was created in September last year with a tariff increment of 316 per cent, which was later revised to 172 per cent during the 2023 quarterly automatic adjustment.

The Chief Executive Officer (CEO) of the AGI, Seth Twum-Akwaboah, at a press conference in Accra yesterday, observed that the companies under the new category previously fell within the industry class, which saw a hike of 48 per cent in the latest review.

Significant increment

He explained that the significant increment seen in the new review was a retrogressive decision with dire consequences for industry and utilities.

“With the foregoing, the AGI is calling on the PURC to maintain its beverage sector companies in their industry category, which has seen a 48 per cent increment in water tariffs.

“We believe industries are a high revenue customer for the Ghana Water Company (GWCL) and deserve equity in the water pricing we see.

“We urge the government to help stem the tide of our macroeconomic instability, which is a major trigger for some of the changes in tariff levels and price hikes,” he said.

Major tariff review

Mr Twum-Akwaboah said the principle of equity was largely missing in the major tariff review conducted in August last year for water, during which a particular customer category was asked to bear a 316 per cent increment in a single tariff review.

“The AGI wishes to reiterate that a tariff increment of 316 per cent and subsequently 172 per cent for its beverage sector under industry will have dire consequences for industry and the GWCL.

“Our utilities risk losing revenue if this trend ends up collapsing the companies. We think it is unfair for the PURC to demand a significant share of revenue from industry, whose cost of service is cheaper.

“We urge the PURC to make public the real cost of service for each consumer category to engender transparency and fairness,” he said

He said the AGI did not think the creation of a new consumer category addressed the challenges in the water distribution system, stressing that such an astronomical tariff increment in a single revision was retrogressive and showed no empathy for Ghana’s ailing industrial sector.

The CEO explained that industries were already under pressure from an unstable business environment and were hoping to see signs of recovery this year.

He said the plight of local producers could be further worsened by the utility tariff increment, as well as inflation at 54.1 per cent, value added tax (VAT) at 21.9 per cent, rising fuel prices and threats of excise duty increments.

According to him, all those developments posed a serious threat to employment prospects and the survival of businesses.

“Again, we have noticed a 48 per cent increment in water tariffs for industry, effective this February, which is a significant deviation from the eight per cent average increment as announced.

“Indeed, within a period of less than six months, electricity tariffs have also shot up significantly on two occasions, 26.6 per cent in September 2022 and 29.9 per cent for this quarter, totalling a 56.5 per cent,” he added.


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