The American Chamber of Commerce, Ghana (AmCham) has disclosed that the upward tariff adjustment and reclassification of Bottled Water and Beverage producer to commercial category is unfair.
According to the Chamber, the decision by the Public Utilities Regulatory Commission (PURC) will bring hardship to the industry. It has therefore called on the Commission to review its decision to place bottled water and drink producers in a new category that attracts higher tariffs.
Contained in a statement signed by its Executive Secretary, Simon Madjie, which backed calls by the Association of Ghana Industries (AGI) for the PURC to end water discrimination, it explained that maintaining the sector in the Industry category as it has always will ensure equity and helps dismiss perceived discrimination.
“We are of the opinion that the recent upward tariff adjustments and the reclassification of Bottled Water and Beverage producers to the Commercial (Special Commercial) category are unfair and place an undue burden on companies.”
American Chamber of Commerce
In spite of the country’s current economic situation and the need for utility companies to adjust prices to reflect the changes in the cost of production and inflation, the Chamber stated that some of these decisions reaffirm the perceived discrimination in the allocation of water tariffs.
AmCham highlighted that recategorizing Bottled Water and Beverage producers with a 172% tariff increment (¢30.00/1000L) is astronomical and unfair.
“This increment, coupled with increasing inflation, currency fluctuations, the new 21.9% VAT rate, and the proposed increments in Excise Duty rates, is disincentivizing and puts companies in a precarious situation.”
American Chamber of Commerce
Industries bearing the shocks of economic crisis
Furthermore, the Chamber pointed out that industry is also currently bearing the shocks and challenges posed by prevailing local and global issues. This, it reckoned unfair, the seeming shifting of economic burdens to companies already making tremendous efforts to keep their operation running to sustain the economy.
“Maintaining employment is vital to the country’s economic recovery efforts. But current trends negatively impact the profitability of companies and could lead to massive job cuts if pragmatic steps are not taken to address the constant increase in the cost of doing business.”
American Chamber of Commerce
The Chamber equally backed earlier calls from the AGI to the PURC to make public the actual cost of service for each consumer category for transparency and fairness. It explained that the Chamber’s member companies are high-revenue customers of the Ghana Water Company, and addressing these issues will ensure constant revenue for the utility company.
“As an organization representing companies with operations in the Bottled Water and Beverage Industry, the Chamber is convinced that it is prudent to revise this reclassification and also ask the PURC to conform to its advertised rates as the new February [2023] tariff increase of 48% for industry is higher than their earlier announced average increment of 8%”.
American Chamber of Commerce
To address the matter, AmCham called for further dialogues between the PURC and our member companies to resolve these issues in the interest of all stakeholders to protect businesses, ensure jobs and help maintain a favorable business environment to boost investments.
It will be recalled that on February 3, 2023, the Association of Ghana Industries (AGI) called on the Public Utility Regulatory Commission (PURC) to maintain its beverage sector companies in their Industry category which has also seen an increment of 48% in water tariff.
AGI expressed that it is looking forward to further engagement with the PURC and the Utility Service Providers in the coming days.
