Speaking on Joy News’ PM Express, Mr. Poku said while the utility companies may have legitimate grounds for their requests, the financial burden would be unbearable for households and businesses.

“The point I want to make is that if you treat it as a business, as we businessmen do, then you’ll be inclined to go line by line and approve it.

“But the problem you would have is that the person who bears the brunt of it is the consumer who can’t afford it,” he cautioned.

The ECG is asking PURC for a 225% increase in its Distribution Service Charge, citing the need to avert financial collapse and ensure reliable supply.

The GWCL, on the other hand, has proposed a 280% upward adjustment, blaming illegal mining and water pollution for soaring production costs.

Mr. Poku explained that Ghanaian consumers are already subsidising water without realising it.

“Ghana Water Company today, I looked through their presentation, and they are producing water far more expensive than what we are paying for per cubic. So that means, Ghana, we are actually subsidising water,” he noted.

He stressed that the challenges facing the two utilities were different but equally severe.

“Because they have different problems, ECG distributes the electricity, but they don’t collect the money. Ghana Water distributes the water, but the cost of producing the water they distribute is very expensive. So that’s the dichotomy between the two of them,” he said.

According to him, a purely business approach would compel the utilities to pass on their costs to the public, but that, he argued, is not sustainable.

“If you treat it as a business, then as a businessman, I will probably want to pass on the cost to the consumer,” Mr. Poku said.

He added, “So that’s where I have always said that in Ghana now, one plus one is not equal to two, because all these things, though justified, Ghana Water Company today, I looked through their presentation, and they are producing water far more expensive than what we are paying for per cubic.”

Source: Abubakar Ibrahim

His regret follows government’s instruction to the Ghana Revenue Authority (GRA) to collaborate with the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to implement VAT on households that exceed the lifeline power consumption.

Finance Minister, Ken Ofori-Atta’s directive, effective January 1, 2024, aims to transfer VAT generated from consumers surpassing the specified maximum consumption level for lifeline units.

In an interview on Joy FM’s Top Story on Wednesday, Mr Poku said while taxes may be necessary to address the energy crisis, imposing them all at the beginning of the year, especially alongside various other taxes, is not ideal.

“I think the timing is wrong. It is a wrong time to introduce more VAT on electricity at this stage,” he said.

According to the energy expert, in as much as there is the cry for more money to be raised to fix the Electricity Company of Ghana and the energy sector, the implementation date should be reconsidered.

He believes there is a need for sensitisation around the VAT introduction on electricity, adding that there is a need to update ECG’s software.

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