AGI warns of possible job losses as manufacturers consider shift to importation over utility tariff hikes

Members of the Association of Ghana Industries (AGI) are reportedly considering significant workforce reductions and a possible shift from manufacturing to importation following the announcement of new utility tariff increases.

The concerns follow a decision by the Public Utilities Regulatory Commission (PURC) to increase electricity tariffs by 3.49 percent and water tariffs by 0.85 percent, effective July 1, 2026.

Speaking in an interview with OTEC News' Dr. Cash on the Dwabrem Afternoon Political Show on Thursday, a leading AGI member for the Bono, Ashanti, Ahafo, and Bono East regions, Mr. Kwasi Nyamekye, warned that the increases could have serious consequences for local industries.

According to him, rising production costs are forcing many manufacturers to reconsider their business models, with some contemplating a transition from production to importation.

“With these utility hikes, many of our members are now considering laying off hundreds of workers. Some are even thinking of moving from manufacturing to importation because production in Ghana has become too expensive,” Mr. Nyamekye stated.

He described the timing of the tariff adjustment as inappropriate, arguing that prevailing economic indicators do not justify the increase.

“For some time now, the exchange rate has been stable and crude oil prices on the international market have declined. So why this tariff increase?” he questioned.

Mr. Nyamekye cautioned that unless the government and the PURC review the decision, local manufacturers could face increased operational difficulties, resulting in reduced productivity and potential job losses.

He stressed that the manufacturing sector remains a critical source of employment and economic growth and should be protected from policies that could further raise the cost of doing business.

The AGI is therefore calling on the authorities to engage industry stakeholders and reconsider the tariff adjustments before they take effect.

According to the association, broader consultations with businesses would help identify solutions that balance the financial sustainability of utility providers with the competitiveness of local industries.

Industry leaders have repeatedly argued that high production costs remain one of the biggest challenges confronting manufacturers in Ghana, affecting their ability to compete with imported goods and expand operations.

The latest tariff increases, they contend, could further intensify pressure on businesses already grappling with rising operational expenses.