The Food and Beverages Association of Ghana (FABAG) is demanding structural reforms in the power sector, warning that repeated electricity tariff increases are undermining industrial growth and placing additional pressure on already constrained manufacturers.
The association’s Executive Chairman, Rev. John Awuni, argues that the country’s approach to addressing challenges in the electricity sector has become overly dependent on tariff adjustments rather than tackling the inefficiencies that continue to burden utility providers and consumers alike.
His comments follow the latest tariff review by the Public Utilities Regulatory Commission (PURC), which announced a 3.49 percent increase in electricity tariffs across all consumer categories and a 0.85 percent rise in water tariffs, effective July 1, 2026.
The PURC said the adjustments were driven by key macroeconomic variables, including inflation trends, exchange rate movements, fuel costs and changes in the electricity generation mix.
However, Rev. Awuni believes the recurring tariff hikes are failing to address the fundamental operational and financial challenges confronting the sector.
“The persistent increases in electricity tariffs are a complete disincentive for industrial development,” he said.
Industry players have consistently identified energy costs as one of the biggest constraints on business growth in Ghana, particularly in the manufacturing and agro-processing sectors, where electricity constitutes a significant share of production costs.
According to Rev. Awuni, higher utility charges are making it increasingly difficult for businesses to expand operations, maintain competitiveness and create jobs.
He cautioned that while tariff reviews may provide temporary financial relief for utility providers, they do little to improve efficiency across the electricity value chain or resolve long-standing structural weaknesses.
“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 stated.
The FABAG Chairman also challenged the notion that Ghana’s power sector difficulties stem from low electricity prices, arguing instead that inefficiencies in management, revenue collection and distribution remain the key issues.
He noted that Ghana already ranks among countries with relatively high electricity costs in the sub-region, suggesting that further tariff increases risk eroding the competitiveness of local industries and discouraging new investment.
Rev. Awuni urged policymakers to pursue more innovative and sustainable reforms that address inefficiencies, reduce losses, and improve operational performance across the sector.
“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 concern is that persistent increases in energy costs could weaken industrial output, slow investment and undermine Ghana’s broader industrialization agenda at a time when policymakers are seeking to accelerate economic growth and job creation.
Rev. Awuni warned that unless policymakers adopt bold and creative solutions to address the sector’s underlying challenges, Ghana risks diminishing investor confidence and limiting the growth potential of its productive industries.
