FABAG Warns: Utility Tariff Hikes Will Cripple Businesses, Fuel Inflation, and Derail 24-Hour Economy
The Food and Beverages Association of Ghana (FABAG) has issued a scathing rebuke against proposed electricity and water tariff increases by the Public Utilities Regulatory Commission (PURC), warning they will devastate small and medium enterprises (SMEs), trigger mass job losses, and undermine President John Dramani Mahama’s flagship 24-Hour Economy policy.
In a strongly worded statement on September 15, FABAG labeled the hikes a “recipe for disaster,” noting the sector’s sales have plummeted 70% amid cedi depreciation and economic pressures. “Businesses are struggling, and further increases will exacerbate woes, forcing families to choose between lights and food,” the association stated, highlighting the burden on low- and middle-income households where utilities already devour disposable income.
FABAG accused the Electricity Company of Ghana (ECG) of rampant inefficiency, including staff indifference to faulty prepaid meters, and demanded “performance-linked tariffs” where hikes are tied to reduced losses and better collections. “Ghanaians cannot keep paying for outdated infrastructure and leakages—it’s punishment, not reform,” the group asserted, urging PURC to phase in adjustments, expand lifeline bands for the poor, and protect SMEs as the “engine of growth.”
The association forecasted “inflationary wildfire,” with higher costs rippling through food, transport, and housing—key inflation drivers—leading to price surges for staples like bread and kenkey. It warned of factory downsizing, layoffs, and eroded competitiveness under the African Continental Free Trade Area (AfCFTA), as Ghanaian products become unviable against cheaper imports.
FABAG called for accountability, insisting utilities cut waste before passing costs to consumers, and echoed broader industry concerns that tariff surges could stall the 24-Hour Economy’s rollout by inflating operational expenses.
The PURC is reviewing proposals, including ECG’s 225% Distribution Service Charge hike and Ghana Water Limited’s 280% increase, amid IMF endorsements for reforms to stabilize the energy sector
