Food Manufacturers Warn Power Tariffs Threaten Ghana’s 24-Hour Economy Drive

Ghana’s food and beverage manufacturers have intensified calls for urgent reform in the power sector, warning that rising electricity tariffs are undermining industrial competitiveness and threatening the government’s flagship 24-hour economy agenda.

The Chairman of the Food and Beverages Association of Ghana (FABAG), Reverend John Awuni, renewed the association’s concerns during a media interview. He argued that Ghana’s current tariff structure places an unsustainable burden on domestic producers and risks reversing efforts to build a resilient manufacturing base.

Awuni maintained that successive tariff approvals have not been matched by demonstrable efficiency gains within the power distribution system. According to him, the practice of raising tariffs to compensate for operational weaknesses “reverses the economic logic entirely”, as it shifts the cost of inefficiencies onto industry and households rather than addressing systemic losses.

Under the latest adjustments approved by the Public Utilities Regulatory Commission (PURC), electricity tariffs increased by 9.86 per cent from 1 January 2026, while water tariffs rose by 15.92 per cent. The adjustments form part of the Commission’s Multi-Year Tariff Order (MYTO) covering the 2026–2030 period, following what it described as investment hearings, regional consultations and macroeconomic assessments.

However, FABAG contends that the increments lack justification in the absence of measurable improvements by the Electricity Company of Ghana (ECG). Awuni cited findings from the 2024 Auditor-General’s Report indicating that ECG recorded distribution losses of 32 per cent of total electricity purchased during the year, significantly above PURC’s approved loss benchmark of 21 per cent.

The report further showed that between August 2023 and July 2024, ECG collected only 43 per cent of the revenue it billed. Although the utility recorded earnings of GH¢11.5 billion, only GH¢8.6 billion was officially declared, resulting in what industry leaders describe as a substantial revenue gap that cannot be bridged by tariff increases alone.

Awuni insisted the solution lies in tightening revenue mobilisation, curbing losses and eliminating theft within the system rather than increasing tariffs. He proposed the establishment of a formal Performance Compact involving the Ministry of Finance, PURC, the Energy Commission and ECG, signed under presidential authority. Such an agreement, he suggested, would bind the utility to clear quarterly targets for reducing technical and commercial losses before any further tariff review is considered.

Pointing to regional precedents, Awuni referenced reforms in Uganda’s power sector, where distribution losses reportedly fell from 38 per cent in 2005 to 16 per cent by 2016, as evidence that operational reform, not revenue extraction offers a sustainable pathway.

The association’s concerns come at a critical juncture as government advances its 24-hour economy policy aimed at accelerating industrial growth and job creation. Awuni warned that affordable and reliable electricity is foundational to that vision, arguing that persistently high energy costs could force production cutbacks, business closures and rising unemployment.

Other industry bodies have aligned with FABAG’s position, including the Ghana Plastic Manufacturers’ Association (GPMA) and the Ghana Union of Traders Association (GUTA). GUTA President Joseph Obeng cautioned that sustained tariff pressures may drive manufacturers to relocate to neighbouring countries such as Togo or Burkina Faso and re-import finished goods into Ghana, effectively weakening domestic value addition.

Industry leaders say the broader risk is that Ghana could drift from being a production-driven economy to one increasingly dependent on imports, undermining long-term industrial policy objectives. As tariff debates continue, manufacturers are urging policymakers to prioritise structural reform within the power sector to safeguard competitiveness and protect jobs.