Electricity tariff hike will cripple businesses and deepen hardship — FABAG warns

The Food and Beverages Association of Ghana (FABAG) has raised strong opposition to the Public Utilities Regulatory Commission’s (PURC) proposed increase in electricity tariffs, warning that the move could devastate local businesses, worsen living conditions, and derail government’s flagship 24-hour economy agenda.

In a statement, the Association cautioned that the private sector, particularly food and beverage enterprises, is already operating under severe pressure and cannot absorb another blow.

“Sales in the sector have already dropped by about 70 percent in recent times, despite food being a basic necessity,” FABAG lamented. “Businesses are struggling to survive, and the depreciation of the cedi has worsened the situation.”

The Association stressed that the proposed tariff adjustment would not only cripple companies but also severely impact households. “Any further increase will hit Ghanaian families where it hurts most — their daily survival. For low and middle-income earners, utility bills already consume a large share of disposable income. A hike will force families to choose between putting food on the table and keeping the lights on,” the statement noted.

FABAG also warned that higher utility charges would fuel inflation. “Utilities form the foundation of Ghana’s cost structure — food, housing, and transport. Increasing electricity tariffs will spark a fresh round of price hikes for bread, kenkey, beverages, and water, with ripple effects across the economy.”

The Association argued that energy poverty would worsen, pushing vulnerable households deeper into hardship. It further questioned why citizens should continue paying for inefficiencies within the power sector. “Should the struggling trader, the nurse keeping a clinic open, or the small business owner be punished for inefficiencies in electricity supply?” it asked.

According to FABAG, any tariff adjustment would also erode Ghana’s competitiveness under the African Continental Free Trade Area (AfCFTA). “Higher production costs will make local goods uncompetitive against imports from countries with cheaper power. This undermines AfCFTA opportunities, discourages investment, and stalls industrial growth.”

The group emphasized the need for reforms before any price adjustment. “Every tariff increase not matched by efficiency gains is a direct attack on jobs, livelihoods, and Ghana’s industrial base. We demand performance-linked tariffs. Utilities must first reduce losses, improve collections, change staff attitudes, and cut waste before passing costs to consumers.”

FABAG called on PURC to protect vulnerable households and small businesses, urging the regulator to expand lifeline bands for low-income users and introduce support measures for struggling sectors.

Concluding its statement, FABAG insisted that Ghanaians must not bear the cost of inefficiency. “A tariff increase without accountability is not reform — it is punishment. PURC must put people first, protect jobs, and support Ghanaian enterprises while demanding efficiency from the utilities.”