The majority or 53% of the over-500 CEOs surveyed in the AGI business barometer for quarter-four of 2015 cited high cost of power as their number-one challenge, followed closely by inadequate supply of the same utility.
The manufacturing and services sectors were particularly concerned about the impact of high cost for power on their businesses.
In terms of business size, small and medium enterprises were more concerned about the high cost of power while ‘large’ firms placed inadequacy of supply ahead of the cost.
Presenting the survey’s results on Tuesday, CEO of the AGI Seth Twum Akwaboah said it is worrying for high cost of power to have come up tops in the quarter-four rankings when it did not even feature in the top-five challenges for the third quarter.
The Public Utilities and Regulatory Commission (PURC) in December announced hikes in both water and electricity tariffs at a combined rate of 126.4%.
Electricity bills went up by 59.2% while water bills rose 67.2% -- increases which were sharply criticised by both the AGI and organised labour.
Government subsequently reduced the electricity tariff by 15%, although it is to be enjoyed only by ‘lifeline consumers’ or consumers who use 50kwh or less.
To reduce the burden of power tariffs on industry, the AGI says there is a need for re-classifying the various electricity customer categories to help address the “unfair incidence” of industry subsidising residential consumers.
“The current tariff regime whereby Industry subsidises residential power users renders Industry less competitive,” AGI President James Asare Adjei read from a communique issued by the Association’s national council.
Business confidence dips
Confidence in the business environment as measured by the AGI’s business barometer dipped marginally in the fourth quarter of 2015.
The barometer indicator dropped from the third quarter figure of 97.29 to 93.12 in quarter four, a further slip away from the baseline index of 100.
“The indicator is still struggling to keep itself above the baseline. It means the business environment has not been good in the period under review,” said Seth Twum Akwaboah, CEO of the AGI.
The Business Barometer Indicator is the statistical mean of Situation and Expectation and expresses the state of business confidence as an index, with 100 as the base index. It is calculated out of “current” business mood and “expectations” for the future.
While they cited high cost and inadequate supply of electricity, cedi instability and multiplicity of taxes, among others, as major challenges they face, some 58% of the over-500 CEOs surveyed were hopeful that the next quarter will be good.
And to make the next quarter and indeed the whole year good, the AGI cautioned government to “avoid the incidence of slipping in unexpected levies that add to the cost of doing business.”
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