Ghana’s 24-Hour Economy Ambitions Dimmed by Soaring Utility Tariffs, GUTA Warns

As Ghana eyes a transformative shift to a 24-hour economy, the president of the Ghana Union of Traders Association (GUTA) has raised alarms over escalating utility tariffs that threaten both business viability and the stability of the cedi. Citing increased operational costs and shrinking profit margins, GUTA contends that the rising cost of power is not only discouraging extended business hours but also undermining efforts to strengthen the local currency. With inflationary pressures lingering, the call is now on policymakers to reconcile ambitious economic reforms with the harsh realities of rising utility costs

The President of the Ghana Union of Traders Association (GUTA), Dr. Joseph Obeng is lamenting over the recent implementation of the hikes in utility tariffs, especially electricity which he says could cripple the government’s flagship 24-Hour Economy policy and reverse the economic gains made through the stability of the Ghana cedi.

Dr. Obeng says the upward adjustment of the electricity tariffs, despite a significant appreciation of the cedi, risks shooting Ghana’s own industrial ambitions and the 24-Hour Economy in the foot.

Contrary to his expectation, he believed the gains made in the exchange rate, which he credits to tighter fiscal discipline, responsible monetary policy from the Bank of Ghana, and coordinated efforts by the government, will improve the business environment by reducing the cost of operations.

Dr. Obeng pointed to the disconnect between the appreciated currency and the recent utility price hikes, stressing that electricity tariffs are critical in determining investor confidence, especially for those targeting manufacturing and industrial sectors.

With this situation, Dr. Joseph fears the 24-Hour Economy agenda, designed to stimulate production, reduce unemployment, and position Ghana as a manufacturing hub, will be in limbo.

The high operational costs, he says, scare off potential investors and strain local businesses already struggling with inflation and taxation burdens.

“If care is not taken, this thing is not going to make it [24-Hour Economy] work. Because any investor that you talk to, the first thing the investor will ask you is, What is the unit cost of electricity in your country? If you mention it, they will always backtrack,” he indicated in an interview with Accra-based JoyNews monitored by Accra Street Journal.

For Dr. Joseph Obeng, the recent utility tariff hike, which took effect this month, was not needed given the gains made in the cedi’s performance.

“The reasons that were assigned to one of them were the exchange rate and the fact that the exchange rate was high. Now, by prudent management of the managers, Bank of Ghana, government itself, fiscal discipline, and all that have been put to bear, fortunately, the rates have come down. So, what are they holding on to again?,” he quizzed.

He continued, “We have a significant reduction in the forex. The cedi has gained strength. So, what are they holding on to? If care is not taken, whatever gains we are going to get will be negated by the increase in tariffs and all that, especially in regard to manufacturing entities.”

Dr. Obeng is calling on the government to urgently engage the Public Utilities Regulatory Commission (PURC) to review and possibly reverse the recent tariff increases, arguing that tariff-setting must now reflect macroeconomic improvements, especially the strength of the cedi.

Last Updated on May 9, 2025 by samboad