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14 October 2013

Mahama expresses worry over TUC ultimatum.

The President, Mr John Dramani Mahama, has expressed disquiet about the 10-day ultimatum given by organised labour to the Public Utilities Regulatory Commission (PURC) and the government to reduce the recent increases in electricity and water tariffs.

He said once the Trades Union Congress (TUC) had a representation on the working group, it was expected that it would wait for the release of the group's report before issuing any threat.

Addressing the Northern Regional and constituency executive members of the National Democratic Congress (NDC) in Tamale on Saturday, President Mahama gave an assurance that the government was ready to work with any recommendation of the working group set up to look into the impact of recent utility tariff hikes.

The meeting was the first that the President had held with the Northern Regional executive members after the verdict on the 2012 presidential election petition had been given which upheld the validity of his victory in that election.

Also at the meeting were the Chief of Staff, Mr Prosper Douglas Bani; a senior advisor to the President, Mr P.V. Obeng, ministers of state and presidential staffers.

The PURC has approved 78.9 per cent and 52 per cent increases in electricity and water tariffs, respectively, with effect from October 1, 2013.

But, on Tuesday, October 8, 2013, organised labour held a press conference and gave the government and the PURC a 10-day ultimatum to reduce the tariffs or face a nationwide strike.

Working Group

President Mahama said the working group, which comprised representatives of the TUC, was constituted to look into the cost build-up to ameliorate the effects on consumers.

He said the group was expected to present its report next week and wondered what organised labour's stance would be if the group recommended a reduction in the tariffs.

"We are waiting for the report, and depending on what it says, the government will be advised accordingly," he said.

Electricity generation

Touching on electricity generation, President Mahama said due to the insufficiency of gas in the country, partly because of the cut in gas supply from the West Africa Gas Pipeline project from 120 million standard cubic feet to 30 million standard cubic feet, many of the country's thermal plants depended on light crude oil.

He said the cost of light crude oil was 70 per cent higher than that of gas, hence the increased cost of electricity generation in the country.

The President said hopefully Ghana would produce its own gas next year from the gas processing infrastructure in the Western Region.

He said for now Ghanaians had to be prepared to pay a little more for electricity.

He said the government still subsidised electricity for more than one million customers of the Electricity Company of Ghana (ECG).

President Mahama indicated that the annual rise in electricity requirement of between seven and 10 per cent required the participation of private companies.

He said the difficulty was that the government could not subsidise the cost of electricity produced by the private sector.


The President said the eight-month election petition scared off investors, while donor partners refused to release funds to the country.

"Because of the election petition, investors were waiting and donor partners held back. That led to the slowing of the economy," he said.

He said Ghana entered 2012 with a deficit of 12 per cent, coupled with the energy crisis and the frequent market fires.

To make matters worse, he said, different groups of workers also embarked on strikes.

Despite those challenges, the President said, "the government is diligent and focused and continues to work to overcome the challenges".

He said the government could not spend much now because of the deficit, but indicated that the current challenges were temporary.

President Mahama said the medium-term economic indicators were good, noting that the challenges were with the short-term indicators.

He, therefore, urged government functionaries to tighten their belts to work hard to bring the economy back on track.

Source: Daily Graphic


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