The 2016 New Patriotic Party (NPP) Presidential candidate Nana Akufo-Addo has called for an immediate reduction of electricity tariffs following reports that the consumer is being ripped off.
He argues that taxes make up a large part of the 19.28 US cents/kilowatt hour the consumer pays in Ghana. Ghana’s neighbour, Cote d’Ivoire charges 9 US cents/kilowatt hour.
His call comes following revelations that more than 62% of Complaints received by the Public Utilities Regulatory Commission in the first quarter of 2016 were on overbilling as compared to the previous year (18%).
Customer Billing Data shows clearly that the Electricity Company of Ghana (ECG) has challenges with migrating customer information from the old Billing System to the new Billing System(Software).
The PURC has since ordered that ECG suspends the use of the troublesome software. But Nana Addo Dankwa Akufo-Addo has observed that the large problem of consumers is the tariffs being paid for power.
The PURC increased electricity tariff by 59.2 % for residential consumers effective December 14, 2015.
The Commission pointed out to 10 factors necessitating the increase. Although no direct mention was made of taxes, the PURC said that one of the factors was the “economic development of the country”.
According to Akufo-Addo, the NDC government’s “insatiable apetite for taxes” is at the heart of the problems consumers face with power supply.
Below is the full statement from Akufo-Addo
I have taken notice of today’s statement made by the PURC that the Electricity Company of Ghana (ECG) should suspend its billing system. I think the matter is more fundamental and should go further than that.
If you look at the rates we are charging, industry, as well as domestic users, for electricity in Ghana, compared, for instance, to Cote d’Ivoire, already, it puts our enterprises in a very uncompetitive comparison.
In Ghana, my understanding is that the tariff for commercial users is 32 US cents/kilowatt hour. The Ivorian equivalent is 13 US cents/kilowatt hour. Again, for domestic users, we are talking about 19.28 US cents/kilowatt hour, when Cote d’Ivoire equivalent is a tariff of 9 US cents/kilowatt hour. So, you put these things together, and, already, Ghanaian industry and economic activity are suffering unnecessarily.
A large part of it is due to the taxes, the insatiable appetite of the Mahama government for taxes – 10% energy levy which is charged for both domestic and commercial uses; a service charge of GH¢7 flat rate for every consumer and a VAT of 17½% for commercial users.
I believe all of these figures can be significantly reduced to be able to bring the electricity tariff system in our country to a much more competitive relationship with that of our neighbours and what is going on in the region. It is important for us to recognize in Ghana that, whatever we are doing, we are doing so in a globally competitive context, and if we don’t recognize that, many of the decisions we make about the management of our economy are going to put us at a disadvantage from the get go.
I am saying it is absolutely imperative and urgent that the public authorities find a way to reduce electricity tariffs in our country immediately and do so now.
