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New Tariff Regime Better Than The Previous – Dr Steve Manteaw

The revised prices published by the Public Utilities and Regulatory Commission (PURC) are supposed to favor enterprises, according to Dr. Steve Manteaw, chairman of the Coalition of Stakeholders in Electricity Concession and Arrangements (COSECA).

His remarks, however, are at odds with those of the Ghana Hoteliers Association and the Association of Ghana Industries (AGI), both of which have expressed concern about a possible detrimental effect of the price rises on the operations of their members.

According to a statement made by Dr. Manteaw, COSECA's analysis demonstrates that "the new tariff regime is more business friendly than the previous." The Public Utility Regulatory Commission (PURC) undoubtedly did the best it could given the circumstances with the approved tariffs, especially if it meant ensuring that the two major utilities could continue to operate.

If nothing is done about the tariffs, COSECA is concerned about the potential impact on the utilities' capacity to continue operating of a 31.7% inflation rate and a close to 100% devaluation of the local currency since the last significant tariff review in 2018. The PURC raised the cost of water by 21% and the cost of energy by 27.15%.

The revised rates take effect on September 1. On August 15th, the regulatory body made this announcement. According to COSECA, inflation was roughly 7.14% at the time for power, for example. According to current data made available by the Ghana Statistical Service, inflation has reached 31.7% today. This indicates that since 2019, inflation has worsened by more than 200%.

Once more, in 2019 the Cedi to the dollar exchange rate was GHC5.20. The value of the Cedi against the dollar has decreased by almost 100% to almost GHC10 today. In 2019, the Bank of Ghana's policy rate was 16%. It is currently at 22%.

This means that because borrowing has become more expensive, local businesses who borrow money to pay for the manufacturing of essential commodities for utilities will raise their prices to reflect the high cost of borrowing.

The important thing to keep in mind is that the utilities will always suffer as a result of the government's poor handling of macroeconomic variables, which will ultimately impact consumers through higher tariffs.

Link: https://3news.com/new-tariff-regime-is-more-business-friendly-than-the-previous-manteaw/

Content created and supplied by: barbaraagyeman006 (via Opera News )

COSECA Coalition of Stakeholders in PURC Public Utilities and Regulatory Public Utility Regulatory Commission

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