Manufacturers warn power tariff hikes threaten Ghana's industrial growth

The Food and Beverages Association of Ghana (FABAG) has called for far-reaching reforms in the country's power sector, warning that repeated electricity tariff increases are hurting manufacturers and threatening Ghana's industrial growth ambitions.

The appeal comes after the Public Utilities Regulatory Commission (PURC) announced a 3.49% increase in electricity tariffs and a 0.85% rise in water tariffs, effective 1 July 2026. The regulator attributed the adjustments to inflation, exchange rate fluctuations, fuel costs and changes in the country's electricity generation mix.

But FABAG's Executive Chairman, Rev. John Awuni, argues that successive tariff reviews have become a substitute for addressing deeper structural weaknesses within the sector.

"The persistent increases in electricity tariffs are a complete disincentive for industrial development," he said.

Manufacturers have long identified energy costs as one of the biggest challenges to doing business in Ghana, particularly in the manufacturing and agro-processing industries, where electricity accounts for a significant portion of production expenses.

Rev. Awuni said rising utility charges are squeezing businesses already grappling with high operating costs, making it more difficult to expand production, remain competitive and create jobs.

He warned that while tariff increases may provide short-term financial support for utility providers, they do little to improve efficiency or resolve long-standing operational challenges.

"Continuous adjustments of electricity tariffs will never make the utility sector efficient, will never make the industrial sector develop, and will never bring illegal users of electricity into a legal space," he said.

According to FABAG, the sector's challenges stem less from electricity pricing and more from inefficiencies in management, revenue collection and power distribution.

Rev. Awuni noted that Ghana already faces relatively high electricity costs compared with some countries in the sub-region, raising concerns that further increases could weaken the competitiveness of local industries and deter investment.

He urged policymakers to focus on reforms aimed at reducing technical and commercial losses, improving operational performance and strengthening revenue recovery systems.

"We must begin to face the bull by the horns, and facing it by the horns is not the continual adjustment of electricity tariffs. That is a very lazy way of dealing with the inefficiency of the power sector," he said.

The association warned that sustained increases in energy costs could weigh on industrial output, discourage investment and undermine the government's broader industrialisation agenda at a time when economic growth and job creation remain key policy priorities.

Rev. Awuni said bold and innovative reforms would be required to restore confidence in the sector and support the growth of Ghana's productive industries.