Why are utility bills rising? GUTA says consumers are paying for inefficiencies

Businesses and households are being forced to pay for inefficiencies within Ghana's utility sector through repeated tariff increases, according to the Ghana Union of Traders' Associations (GUTA).

The association's president, Clement Boateng, has questioned the justification for the latest utility tariff adjustments, arguing that power and water providers should focus on reducing operational losses rather than passing financial pressures on to consumers.

His comments come after the Public Utilities Regulatory Commission (PURC) announced new tariffs that will take effect on 1 July 2026, raising electricity prices by 3.49% and water tariffs by 0.85%.

The increases are expected to add to the cost burden facing businesses already grappling with higher operating expenses and consumers dealing with rising living costs.

"Consumers should not pay for inefficiency"

Speaking on Joy FM's Midday News, Mr Boateng said the financial challenges facing utility providers stem largely from weaknesses within their own operations.

"They should know that the financial challenges they find themselves in are attributed to their own inefficiencies in their operations," he said.

According to him, substantial losses within the water and electricity sectors continue to undermine the financial health of utility companies.

"If you take Ghana Water Company, for instance, they are recording operational losses of between 51% and 52%. In the electricity sector, operational losses are about 32%," he said.

Billions lost through theft and illegal connections

Mr Boateng argued that a significant portion of the losses result from electricity theft, illegal connections, leakages and wastage within distribution networks.

He said addressing these challenges could generate substantial savings and improve revenue collection without requiring frequent tariff reviews.

"These losses account for a huge part of the challenges they are facing. They arise as a result of theft, illegal connections and wastage in the system," he said.

Industry analysts have long identified technical and commercial losses as one of the biggest financial challenges facing Ghana's utility sector, with concerns that inefficiencies continue to drain resources needed for infrastructure upgrades and service improvements.

Growing pressure on businesses

The latest tariff increases have reignited concerns among traders and manufacturers, many of whom say rising utility costs are squeezing profit margins and increasing the cost of doing business.

GUTA argues that reducing operational losses should be prioritised before additional costs are transferred to consumers.

Mr Boateng said tackling inefficiencies would strengthen the finances of utility providers while helping businesses remain competitive and households better manage their monthly expenses.

A wider debate over utility pricing

The tariff adjustments come at a time when policymakers are seeking to stimulate economic growth, expand industrial activity and improve living standards.

Business groups have repeatedly warned that rising utility costs can affect investment decisions, increase production costs and ultimately push up consumer prices.

For many consumers, the latest increases raise a familiar question: should utility companies first fix losses within their systems before asking customers to pay more?

As the new tariffs take effect next month, that debate is likely to intensify.