Ghana’s Food and Beverages Association warns utility tariff hikes could cripple businesses, threaten jobs 

GHANA – The Food and Beverages Association of Ghana (FABAG) has voiced strong opposition to proposed increases in utility tariffs, warning that such moves could cripple businesses and undermine the government’s flagship 24-hour economy policy. 

The Electricity Company of Ghana (ECG) has proposed a steep rise in electricity distribution charges, including an average 224 percent increase in the Distribution Service Charge (DSC1) over the 2025–2029 tariff period.  

According to FABAG, these proposed hikes would exacerbate the already severe challenges facing businesses, particularly those in the food and beverage sector. 

In a press release dated September 14, FABAG said sales in the sector have plummeted by up to 70 percent amid economic challenges, including the depreciation of the Ghanaian cedi. Many restaurants, hotels, wholesalers, and retailers are reportedly seeing near-zero sales daily, with businesses struggling to stay afloat. 

“The business sector is at a standstill. Food may be a necessity, but people are simply not buying,” FABAG stated, warning that further cost increases could devastate small enterprises such as bakeries, cold stores, and local restaurants. 

The association stressed that electricity and water are critical inputs for the sector, which is one of Ghana’s largest employers. Higher tariffs, it said, would erase already thin profit margins, force closures, and lead to widespread job losses. 

FABAG further cautioned that rising utility costs could trigger additional inflationary pressures, pushing up the prices of essential items including bread, kenkey, water, and beverages.  

It warned that such outcomes would directly undermine the government’s 24-hour economy initiative, which seeks to promote continuous business activity and industrial growth. 

“Utility costs are a major part of food, transport, and housing — the key drivers of inflation in Ghana. Increasing tariffs now will unleash a new wave of price hikes that will hurt households and slow economic growth,” the association stated. 

While acknowledging the importance of cost-reflective tariffs, FABAG called for a fair and phased approach tied to performance improvements by utility providers. It demanded transparency in tariff calculations and urged the Public Utilities Regulatory Commission (PURC) to publish full cost breakdowns. 

The association also urged PURC to expand lifeline tariff bands to protect low-income households and introduce measures to cushion small businesses from rising costs. It concluded by calling on the commission to reconsider the proposed tariff increases in light of their potential impact on jobs, investments, and industrialisation. 

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