’24-Hour Economy at risk if tariffs go up’ – Food & Beverages Association

The Food and Beverages Association of Ghana (FABAG) has strongly opposed proposed increases in utility tariffs, cautioning that such hikes would cripple businesses and derail the government’s flagship 24-hour economy policy.

The Electricity Company of Ghana (ECG) has, for instance, proposed a sharp upward review of electricity distribution charges, seeking an average 224 percent increase in the Distribution Service Charge (DSC1) for the 2025–2029 tariff period.

In a statement issued on Sunday, September 14, FABAG warned that the move would worsen the already dire situation facing businesses in the country, particularly those in the food and beverages sector.

According to the association, sales in the sector have already plummeted by as much as 70 percent due to the current economic crisis, including the depreciation of the Ghana cedi. Many restaurants, hotels, wholesalers, and retailers are reportedly recording near-zero sales daily.

“The business sector is at a standstill. Food may be a necessity, but people are simply not buying. If the food sector is this badly hit, what is happening in the non-food sector?”

FABAG argued that any upward tariff adjustment would lead to higher production costs, job losses, and the collapse of small businesses such as cold stores, bakeries, and local restaurants, many of which are already struggling to survive.

“The food and beverages sector is one of Ghana’s largest employers and heavily depends on electricity and water. Increasing tariffs will wipe out thin profit margins and force many SMEs to shut down,” it added.

The association further warned that the hikes could spark inflationary pressures, driving up the prices of essentials such as bread, kenkey, water, and beverages, while also pushing transport fares higher, a situation that would place an even greater burden on households.

FABAG also expressed concern that the proposed increases would directly undermine the 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 statement cautioned.

While the association reiterated its support for cost-reflective tariffs in principle, it stressed that any adjustments must be fair, gradual, and linked to improved performance by utility providers.

FABAG is urging the Public Utilities Regulatory Commission (PURC) to ensure greater transparency in how tariffs are calculated and to publish detailed cost breakdowns.

“We demand performance-linked tariffs. Utilities must first reduce system losses, improve collections, and eliminate inefficiencies before passing costs onto consumers,” it said.

The group also called on PURC to expand lifeline tariff bands to protect low-income households, while introducing cushioning measures to support small businesses.

“The government must not allow inefficiencies in the utility sector to be paid for by struggling mothers selling bread at dawn or small business owners trying to survive,” the statement concluded.

FABAG has therefore appealed to PURC to reconsider the proposed tariff hikes, warning that their implementation could have devastating consequences for jobs, investments, and Ghana’s industrialisation drive.