The Executive Secretary of the Public Utilities Regulatory Commission, Dr. Ishmael Ackah, says the cross subsidy that residential consumers enjoyed at the expense of businesses has been reduced to ensure that businesses stay and thrive in the country.
According to him, the cross subsidy to residences was reduced by a little over 30% in an attempt to bridge the gap between residential and non-residential tariffs.
He noted that over the years, businesses have been fleeing Ghana for countries where non-residential consumers pay less than residential consumers due to the fact that for the past 25 years, businesses in Ghana have been made to subsidise utility tariffs for residential consumers.
In response, the PURC by bridging the gap between residential and non-residential consumers is seeking to retain and attract businesses into the country to aid Ghana’s economic recovery.
Dr. Ackah, while giving more details on JoyNews’ PM Express, on Monday said “What we did was not to pass on so much cost to the residential, what we did was to reduce the cross subsidy. So consistently over a time, industry has been subsidizing the residential sector.
“Now we hear in even the news that businesses are leaving, some are relocating to Cote D’Ivoire because there businesses pay far lower than the residential sector. You go to Uganda it’s the same thing, you go to Namibia, almost everywhere businesses pay less. Why? Because it costs less to serve businesses than to serve residential customers. That’s the first one.”
He added, “The second one is that they’re using the power for productive purposes and when they expand they recruit the people from within the residential, pay them well, so they create jobs. They can expand and contribute to economic development and all those ones so almost everywhere businesses pay less.
“In Ghana it has been the reverse since PURC was established 25 years ago. It may have a reason why it started. But it comes to a point where we need to, if nothing at all, let residential match non-residential. And the reason is that yes, so that businesses can stay and employ people. Businesses can stay and expand.”
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