The Ghana Union of Traders’ Associations (GUTA) has questioned the rationale behind the latest utility tariff increases.

It argues that key economic indicators cited to justify the decision have all moved in a positive direction and should have supported a reduction instead.

Speaking on Joy News’ PM Express on Tuesday, GUTA Vice President Joseph Paddy said traders were caught off guard by the announcement and were not consulted before the decision was taken.

“We slept one night, woke up in the morning, and we heard announcements that they’re going to be tariff adjustment increase, and we’re like, why, when we were not engaged,” he said.

Mr Paddy insisted that meaningful stakeholder consultation is essential before decisions that affect businesses and consumers are implemented.

“For good governance, you need stakeholder engagement and participation. So if you’re going to increase tariff you need to engage,” he stated.

He also challenged the basis for the tariff adjustment, saying the reasons outlined by the regulators did not support an increase.

“In the letter, all the proposals they put in place - fluctuation of the cedi, about four issues they cited - we see they are all in a positive direction. If they are in a positive direction, then why do you want to increase utility tariffs?” he asked.

According to him, the appreciation and stability of the cedi over the past several months should have eased pressure on utility costs rather than justified higher charges.

“Now we have stability of the cedi against the dollar for some time now, for over 15 to 16 months, which we think now today, when I was taking a dollar to a cedi, is about ¢11.25 or so, which is in a positive direction.”

He contrasted the current exchange rate with previous levels during a period when the local currency came under severe pressure.

“Once upon a time, it was around ¢17 to $1,” he noted.

Mr Paddy further pointed to falling interest rates as another indicator that, in his view, weakens the case for higher tariffs.

“And then the interest rate has dropped. Today, interest is moving around 12%. The exchange rate has also dropped.”

He argued that when all the economic variables are considered together, businesses had expected utility prices to move in the opposite direction.

“So, putting all these factors together, we were thinking that if anything should, if there is going to be an announcement at all, it’s be a reduction, not an increase,” he said.

The GUTA Vice President maintained that the tariff adjustment has raised concerns within the business community, not only because of its timing but also because traders believe the improving macroeconomic environment should have translated into lower utility costs rather than higher ones.