The steep rise in power and water tariffs has incurred the outrage of labour and industry leaders, who fear that living standards of workers will fall and industry will suffer a crunch.

In a statement issued after an emergency meeting of its steering committee, the Trades Union Congress (TUC) called for a halt in the implementation of the new tariffs and said the sharp increases - 78.9 percent for electricity and 52 percent for water - are above the pockets of ordinary Ghanaians.

“The steering committee is outraged by the rate of increases announced by the Public Utilities Regulatory Commission (PURC). The committee took the view that increases of such magnitude can only be described as insensitive and a stab in the back of Ghanaians,” said the statement signed by TUC Secretary-General Kofi Asamoah.

Industry leaders have also warned that the already-troubled manufacturing sector risks a sharp decline as small- and medium-scale producers face a crunch because olf the tariff hikes.

The share of manufacturing in the country's GDP has been shrinking for decades, and the sector accounted for only 6.7 percent of output in 2012.

Manufacturing and industry rely heavily on stable and cheap supply of electricity and water; therefore, any huge increase in tariffs is seen as detrimental to competitiveness of the sector.

Alex Frimpong, Chief Executive Officer of the Ghana Employers Association (GEA), said the tariff increases will distort the cost projections of businesses, increase their cost of production and render them uncompetitive.

“As a body representing business, we are not happy when a key component like electricity has such a huge price hike. It distorts all your cost projections and impacts on the competitiveness of your products and business as a whole.”

He said while the GEA is not against full cost- recovery by the utilities, it wants the automatic tariff adjustment formula - a mechanism for periodic, marginal adjustment of utility tariffs - to be followed dutifully, and a broader businesses by the PURC.

“We have indicated time without number we should let the mechanism that is used to adjust tariffs work. If that is followed to the letter, I am not sure this country would be witnessing these high utility tariff hikes that are bedevilling industry and domestic consumers.

“If the automatic tariff adjustment formula is followed, then you can budget in a more predictable, more consistent manner. In a situation where out of the blue an astronomical increase is thrown at you, it creates a lot of difficulties for everybody.”

Both Mr. Frimpong and the TUC criticised the inefficiencies of the utility companies, worrying that consumers are being asked to pay for their huge losses.

The PURC in a statement last week issued new benchmarks for technical and commercial losses that it will tolerate. This included a limit of 21°/o for distribution losses accumulated by the Electricity Company of Ghana and the Northern Electricity Distribution Company.

But the TUC was not convinced: "Every round of tariff adjustments were needed to enable the utility companies deliver quality and efficient services. Thus far, such promises have turned out to be a hoax - an indication that there are other more important issues affecting the provision of utilities than the supposedly low tariffs."

Mr Frimpong also said, "if the utilities cannot address the issue of waste, what are they doing as a business? If you are selling 80 percent of your products to cover the cost of 100 percent, naturally the prices are likely to shoot up.

"We should be able to distinguish between the cost of the product and the price. If we are able to overcome the issues of cost, the increases from time to time will be quite tolerable and within limits that are affordable to everybody."