The Association of Ghana Industries (AGI) says in order for its members to adequately compete upon the implementation of the Africa Continental Free Trade Area (AfCFTA), electricity tariffs will have to be revised downwards.
It argues that the cost of electricity is relatively higher in Ghana as compared to other countries in the subregion.
Speaking to Citi Business News, Johnson Opoku-Boateng, Director of Business Development Service at AGI, indicated that if these concerns were not addressed, industry players in the country would be disadvantaged when the AfCFTA commences.
He said “When it comes to electricity tariffs l think that averagely we are clocking around 17 cents per kilowatts hour, and then we have members of our sub-region who are doing much better. If you go to South Africa, it’s much lower although we will say that there are some other countries who are ahead of us in terms of the tariffs averagely.”
“It is not looking too good for us because industry needs to have a tariff that is quite low to be able to make it. When it comes to the utility portfolio, I am not too sure what Ivory Coast and the others are doing that is making their tariffs go low. But of course, we know that the exchange rate is a very big factor when it comes to these levitations and probably we may have to study what they are doing right that we are not doing,” he said.
Mr Opoku-Boateng said “the most important thing is that if we want to grow as a nation, manufacturing is a very key area that we have to be looking at. If we don’t look at manufacturing, a time will come when we are going to be allowing other companies and other countries to take advantage of the AfCFTA and flood our market with their goods. It means there is no other way other than that and Ghana is going to be the ultimate loser.”
According to GlobalPetrolPrices.com a website that publishes energy data from countries around the world, as of March 2020, the price of electricity in Ghana is 0.063 U.S. dollar per kWh for households and 0.135 U.S. Dollar for businesses which includes all components of the electricity bill such as the cost of power, distribution and taxes.
For comparison, the average price of electricity in the world for that period is 0.140 U.S. Dollar per kWh for households and 0.125 U.S. Dollar for businesses.