The Association of Ghana Industries (AGI) has lauded the 2018 Budget, saying, some of the policies and initiatives introduced will result in growth of the country’s industrial sector.
Outgoing president of the business lobby, James Asare-Adjei, singled out the power tariff reductions for praise – although he said they expected it to be more.
Government has proposed the following power tariff reductions: residential 13 percent; non-residential 13 percent; special load tariff—low voltage 13 percent; special load tariff—medium voltage 11 percent; special load tariff—high voltage 14 percent; and high voltage 21 percent.
“AGI lauds the 2018 budget. In fact, we welcome key initiatives of the budget, particularly when it comes to the proposed reduction in the cost of tariffs on electricity. It is a good initiative in ensuring that industry becomes more competitive.
“Largely, the budget is building on the stability that has been achieved in the year 2017. It gives the dimension of growth to the economy. So, AGI lauds the budget because it specifically looked at certain areas that will stimulate the economy,” he said.
He however urged government to provide an energy mix that will make power even cheaper to industry in order to help it compete with others in the sub-region and in the world at large.
“We would have wished that a lot more reduction could have been applied to the tariffs. You know, at the moment we are competing with companies in the sub-region or globally where energy tariffs are way down. While we are paying over 20cent/kwh, some are paying 15cent/kwh or less. In places like China, they are paying 3 or 4 cents/kwh.
“So, while we applaud government’s bold initiative of really proposing to reduce the energy tariffs, we should look critically at dedicating cheaper sources of power like hydro to industry – because that is what will make businesses competitive,” he said.
Government also announced in the budget that it will set up a development bank to help address the financing challenges of businesses, and here, too, the AGI president was full of praise.
“Let me also mention that government’s decision to set up a development bank is in line with AGI’s initiative of promoting an industrial development bank – of which an initiative has been taken in applying for a provisional licence.
“AGI will be much prepared to partner with government in establishing a development bank of that nature. One of the challenges that industry faces in the country involves accessing medium- to long-term capital. So, it is a bold initiative from government,” Mr. Asare Adjei said.