Many have noticed a slight yet consistent rise in their monthly statements. The cause of this seemingly stealthy price hike, as revealed by the Public Utilities Regulatory Commission (PURC), is both unexpected and troubling.
Ghana's water consumers are now paying an additional 1 Ghana cedi on every water bill. The reason? To assist the Ghana Water Company in properly treating water at various pumps. The explanation provided by the Commission is tied to the soaring cost of water treatment, a consequence of illegal mining activities, commonly referred to as 'galamsey.'
The Ghana Water Company, already grappling with the damaging consequences of 'galamsey,' had previously warned that it might be compelled to shut down some treatment plants due to the severe impact these activities were having on its operations.
Dr. Ismael Ackah, the Executive Secretary of the PURC, clarified that the increase in tariffs aims to ensure the continued operation of the Ghana Water Company and its treatment facilities. He explained, "For water, the major drivers, one is electricity. However, because we said the industrial customers will experience no increase, this time it didn’t have any effect."
He continued, "The (second) major driver for water is the cost of chemicals. So before recently, they were using chemical for water treatment, now what they have moved on to is what we call Colima, which is about two and half times more expensive than what they were using previously. Because of galamsey and others, they have to treat the water, go through a process over three times what they used to do, so the cost of water has really gone up."
In simple terms, if your water bill was 100 cedis before, you are now paying an extra 1 cedi due to the increased cost of water treatment resulting from illegal mining activities.
However, amidst these tariff adjustments, the PURC has made a noteworthy exception for industries. Industrial consumers have been exempted from the 4 and 1 percent tariff adjustment for electricity and water, respectively. This decision was made to safeguard jobs and prevent companies from relocating their operations to countries with lower tariffs.
Dr. Ackah explained, "Industries pay more than they should pay so that residential customers will at least have some space to breathe. But this is also affecting the cost of operation by industries, so we have heard from the AGI that some companies are actually moving their base from Ghana to Cote D’Ivoire or Nigeria where industrial tariffs are lower."
He further emphasized the impact on the cost of production and employment. "So if the cost of production is going up, 'why don’t we lay off at least some five people so that we can pay the electricity bill,' therefore we thought that at least we should do it gradually to bring industry to their cost of service with the hope that this will help reduce their cost of production and help them employ more Ghanaians."
The decision to exempt industries aligns with the PURC's intention to strike a balance between tariff adjustments and the welfare of Ghanaian consumers. By preserving jobs and preventing the exodus of industries, they aim to support both the economy and employment opportunities within the nation.
Moreover, the PURC is diligently working to adhere to the conditions set by the International Monetary Fund (IMF) to address the energy sector. They have adopted a quarterly adjustment mechanism to ensure consistency in implementing tariff adjustments, thus reducing sector debts and averting the need for drastic measures such as tax hikes.
The Executive Secretary underscored that they have considered the welfare of Ghanaians alongside the recommendations of international organizations. This decision reflects the PURC's commitment to balancing fiscal responsibility and the well-being of the Ghanaian population.