The Association of Ghana Industries (AGI), has lamented the high cost of electricity in the country, noting that it is killing industries in the country.
According to the AGI, the cost of power in Ghana for industries is super high, compared to what pertains in other African countries such as Ethiopia. The association thus, charged the government of Ghana to, as a matter of urgency, work to reduce the cost of doing business in the resource-rich West African country.
Chairman of the AGI, Mr. Tsonam Akpeloo, asserted that the situation is making it difficult for local industries to compete with their foreign counterparts.
Mr Akpeloo surmised that the business environment in the country is very harsh to businesses. As such, he called on the government to also ensure that commercial banks reduce the lending rate which he noted is too high.
“We realize that the entire environment in doing business is very harsh for the entrepreneur. The cost of power is super high, we are buying power 16 cent per kilowatt per hour for industry, that is so high compared to what happens in other parts of Africa.”
Mr. Tsonam Akpeloo
Cost of Doing Business Harsh
The Chairman indicated that the high cost of credit in the country leads to high cost of production which is not the best for industries.
“The cost of credit hovers around 24 per cent per annum, that is so high. So overall, the cost of production is so high and it is making us look not good as far as competition is concerned. What we are asking government to do is to continue to address some of these issues, they should reduce the cost of power. They should reduce the policy rate and ensure the commercial banks actually reduce the interest or the lending rate because that is very important for us.
“We realize that in the wake of the Continental Free Trade Agreement, we are going to be competing with countries like Ethiopia. Ethiopia buys power around 6 cent.”
Mr. Tsonam Akpeloo
Government Thinks Otherwise
The Vice President, Dr. Mahamudu Bawumia indicated that the Akufo-Addo administration is the first government to have reduced electricity tariffs in the history of the Fourth Republic.
The Veep stated that the reduction in electricity prices in 2018 was the most significant intervention in the utility sector by the government in recent times.
“[In] 2018, we reduced electricity prices by 22% and by the way, this is the first government in the history of the fourth republic that has reduced electricity prices. And in 2019, we increased the prices by 11% but when you take the net between 2019 and 2018, in net terms, since we’ve been in office, we’ve reduced electricity tariffs by 10%. This has never happened before in the 4th republic and therefore it is a promise we have fulfilled.”
Dr. Mahamudu Bawumia
On the issue of the high interest rate, a former President of the Volta Regional House of Chief, Togbe Afede XIV who is also an astute businessman in Ghana, also lamented the same issue and called on the Bank of Ghana to act to deal with the situation.
In response to him, the central bank said it also had a strong commitment not to be distracted by such discussions but rather remain focused on its primary mandate of controlling inflation.
“More recently, the current Management of the Bank of Ghana has worked very closely with other key stakeholders to achieve significant stability in the last four (4) years.”
BoG
READ ALSO: Health Expert Hints On Surge In COVID-19 Cases In January
