High Utility Tariffs Threaten Ghana's AfCFTA Competitiveness – GUTA
Oct 07, 2025
High Utility Tariffs Threaten Ghana's AfCFTA Competitiveness – GUTA
October 7, 2025
The Ghana Union of Traders Association (GUTA) has warned that escalating utility tariffs are severely undermining the country's ability to compete effectively within the African Continental Free Trade Area (AfCFTA), placing Ghanaian businesses at a significant disadvantage.
Competitive Crisis
Speaking at a press conference in Accra on Monday, GUTA President Dr. Joseph Obeng expressed grave concerns about how high electricity and water costs are inflating production and operational expenses, making Ghanaian goods uncompetitive in regional markets.
"We all realise that we are participating in AfCFTA, yet Ghana is lagging behind. We are not competitive, and our goods cannot even compete with those from Togo. The reason is the high cost of doing business here, especially regarding utility tariffs," Dr. Obeng stated.
Impact on Businesses
According to GUTA, the current tariff regime is having devastating effects across multiple fronts:
- Inflating production and operational costs
- Eroding profit margins for businesses
- Forcing price increases on goods and services
- Discouraging both local and foreign investment
- Threatening the survival of small and medium enterprises
Dr. Obeng emphasized the urgency of addressing these challenges, noting that the high cost of utilities continues to make Ghanaian products less competitive compared to neighboring countries within the continental trade framework.
Call for Government Action
GUTA has called on the government to urgently review recent tariff hikes and provide relief for businesses struggling under the weight of mounting operational costs.
"It has not helped us. The earlier we solve these issues, the better," Dr. Obeng stressed, urging government and regulatory authorities to collaborate with the business community to develop a fair and sustainable tariff structure.
The association believes that addressing the utility cost crisis is essential for supporting industrial growth and enhancing Ghana's meaningful participation in the AfCFTA market.
Industry Support for Reform
The concerns raised by GUTA have found support from other business groups. The Ghana Food and Beverages Association (FABAG) has similarly called on President John Dramani Mahama to implement urgent reforms at the Electricity Company of Ghana (ECG).
FABAG Chairman John Awuni argued that persistent tariff increases, despite ECG's recurring financial losses, demonstrate that price hikes alone cannot resolve the power company's challenges.
"There shouldn't be any tariff increment. Because no amount of tariff increment can solve the problems of ECG. There must be a reform, and that reform is aimed at reducing the technical and commercial losses to reasonable standards," Awuni stated.
Structural Issues at ECG
The association emphasized that the solution lies not in raising tariffs but in addressing fundamental structural problems at ECG, particularly technical and commercial losses that have plagued the utility company for years.
FABAG stressed that the high cost of electricity is taking a heavy toll not only on businesses but on Ghanaians at large, affecting household budgets and overall economic wellbeing.
AfCFTA Implications
The concerns come at a critical time as Ghana seeks to maximize benefits from the African Continental Free Trade Area, which promises to create the world's largest free trade area by connecting 1.3 billion people across 55 countries.
However, business leaders warn that without competitive utility rates, Ghanaian manufacturers and traders will struggle to take advantage of the expanded market access, potentially losing ground to competitors from countries with lower operational costs.
The call for tariff reform underscores the delicate balance policymakers must strike between ensuring the financial sustainability of utility companies and maintaining a business environment that supports economic growth and regional competitiveness.
