Ghana: Bawumia Justifies 5.94 Percent Increment In Electricity Tariff

His Excellency Dr. Mahamudu Bawumia, Vice President of the Republic of Ghana

Ghana’s vice president, Dr. Mahamudu Bawumia, has rejected claims by the country’s opposition party that the Akufo-Addo Government is, contrary to its promise while in opposition, increasing electricity tariffs rather than reducing them.

Speaking at the launch of four initiatives by the Youth Employment Agency in the West Africa, Dr Bawumia insisted that available records do not support the claim by the opposition NDC, saying a comparative analysis of the records would clearly show which party has burdened Ghanaians with high electricity tariffs.

The Public Utilities Regulatory Commission (PURC) announced a 5.94 per cent increase in electricity tariffs on Monday 30th September, 2019, barely three months it announced 11.17 percent increment.

In a statement signed by the Executive Secretary, Mami Dufie Ofori and copied to Monday, the PURC explained that the increase in tariffs was determined by the Automatic Adjustment Formula (AAF) which considers eight factors including Ghana cedi-US dollar exchange rate, inflation, price of crude oil and natural gas and fuel mix (Crude Oil, Natural Gas and Distillate Fuel).

Other factors are generation mix (Hydro and Thermal), power purchase cost, demand forecast and electricity cost (A major cost component in water production).

However, the opposition party claimed that Government had mismanaged the electricity sector, hence the “unprecedented” increase.

But the Vice President maintained that the Nana Akufo-Addo government had kept faith with Ghanaians and had for the first time in Ghana’s history, cumulatively reduced tariffs since assuming office on January 7, 2017.

“You would have heard that the PURC has increased electricity tariffs by 5.94 percent. It is very important for us to have some perspective on this, because electricity has a bearing on the cost of doing business and you have to be having your eye on it so that we don’t overburden businesses.

“What was the situation before we came into office? I’ll give you a background. In 2010 the average increase in electricity was 89 per cent; 2011 was 10 per cent; 2013 was 78 per cent; 2014 was 28.3 per cent; 2015 was 59.2 per cent. Between 2013 and 2016, just the last four years of the NDC government, the cumulative increase in electricity tariff was cumulatively 166 percent.

“It is against that background that we said ‘this is not good for job creation’. If you want to create jobs you have to reduce the burden of electricity tariffs on our people. And this is why when we came in – and it had never been done before – that we reduced electricity prices for businesses by 30 per cent and for households by 17.5 per cent; average of around 22 per cent in 2018.

“Notwithstanding that, earlier this year in July there was an increase in electricity prices of 11 per cent and yesterday of 5.6 per cent. When you take the total cumulative increase on average, between 2017 and today you have a cumulative decrease of about 5 per cent.

“The NDC in their last four years increased tariffs by 166 per cent; increase. We have come down since we’ve been in government by about 5 per cent. So it is still ‘boot-for-charlie wote’ when you come to electricity tariffs.”




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