Workers deserve 20% cola urgently

• Posted on June 30, 2022June 30, 2022
• by Nana Kwesi Coomson
• Comment

-Proposed hikes in utilities tariffs should be suspended – TUC


The Trades Union Congress has appealed to the president, Nana Addo Dankwa Akufo-Addo, to exercise his executive powers to grant a 20% Cost-of-Living Allowance (COLA ) to all public servants and retirees.

It also said, the request by utility service providers in the country for increment in prices of electricity and water will compound the current hardship that Ghanaians are going through.?

20% COLA
In a letter copied to the Minister of Finance and Economic Planning, Ken Ofori-Atta, as well as the Minister of Employment and Labour, Ignatius Baffour-Awuah, TUC reminded the President of their appeal for COLA during the 2022 May Day celebrations.

27.6% inflation rate
The Union justified the need to remind the president of their request based on the high level of inflation in the country which is currently at 27.6%.

Food inflation rises to 30%
In 11 months, food inflation in Ghana increased from less than 10% in July 2021 to 30% in April 2022.

COLA to cushion workers, pensioners and to prevent mass poverty
According to the umbrella body, the proposed COLA will not only cushion workers and pensioners from inflation but will also prevent mass poverty.

Proposed utilities tariffs hikes
 The Ghana Water Company Limited (GWCL) is seeking an increase in water tariff of 334%, while the Electricity Company of Ghana (ECG) is asking for a 148% increase in tariffs for 2022.?

The Volta River Authority (VRA) has proposed a tariff increase of 37%, Northern Electricity Distribution Company (NEDCo), 113%, and Ghana Grid Company Limited (GRIDCo), 48% increase in transmission charge.?

Utilities justify request for increment
The utilities explained that the rising prices and the depreciation of the Cedi had increased their cost of operations far above their revenues and needed to undertake critical investments and upgrade of their infrastructure with the proposed increment.?

Potential to turn economic crisis into social and political crisis
However, the Union said the proposals have a great potential to turn the economic crisis into social and political crisis that will be more difficult to address.

Hiking tariffs will compound current hardship
TUC argued that the request by utility service providers in the country for increment in prices of electricity and water will compound the current hardship that Ghanaians are going through.?
The Union said, since the economy had not fully recovered from the ravages of the COVID-19 pandemic, with emerging challenges from the Russia-Ukraine conflict, the upward review of tariff will compound the plight of households who were already suffering from the severe economic crisis.?
As such, the Union, which is the largest umbrella body of workers in Ghana, had asked the sector regulator, the Public Utilities Regulatory Commission (PURC), not to grant the request of the utilities until the crisis was over.?

Any astronomical increases in tariffs can trigger social upheavals
The Union said: “In our current economic and social situation, workers and Ghanaians will have very little levers to absorb such shocks.
“This is not the time for a major review of utility tariffs. Any astronomical increases in tariffs could trigger social upheavals.”?

The TUC has thus made the five recommendations to the PURC to ensure that the current political, economic and social crises Ghanaian’s are facing are not exacerbated.
The TUC suggests that the major tariff review be postponed until the cost-of-living crisis is over.
The Union also pointed to the fact that many of those who lost jobs are still without jobs.
It noted that while incomes have fallen by more than a third in the last two years, general price levels have more than tripled since wages and salaries were last reviewed in the public sector.
They also insist that utility companies reduce waste to the minimum and improve their operational efficiency before PURC approves any tariff increases for them.    
The Union also poked holes into suggestions that electricity tariff bands be eliminated, describing these calls as “ill-timed.”
The TUC notes that a significant number of consumers could see a spike in their electricity bills even as some others will experience a reduction in their bills.
According to them, the disadvantages of this proposal could far outweigh its advantages, and “Ghanaians will have very little levers to absorb such shocks.”
The Union thus called on government to continue to support the utility companies to undertake some of the critical investments needed to ensure the stability of the electricity and water networks.
For electricity, this will mean supporting the planned investment by VRA to expand generation in line with the energy supply plan of the country.
It will also require supporting the Ghana Grid Company to strengthen its transmission lines to reduce overloads on the various bulk transmission lines and power stations.
Government will also have to make fiscal allocations for the costs of reserve margins and idle capacity (excess capacity charge).
The TUC finally suggests that government addresses the challenges posed by the Desalination Plant once and for all.
The Government should also ensure a comprehensive review of the 25-year take or pay contract of the Desalination Project, to make it fair to Ghana.  
The contract has obliged GWCL to pay Befesa Company Limited $1.3 million every month whether the Company produces water or not.?
According to the TUC’s statement, during August of the year when the turbidity levels of the sea water are such that the Befesa Plant cannot produce the required water, GWCL is still obliged to pay the company.
They also accused the company of consistently failing to provide the contracted volumes of water.
According to the TUC’s statement “The contract cannot be abrogated even when the company consistently fails to produce water for which the contract was signed.”
The TUC described the current take or pay contract as a “bad contract that should never have happened.”
They insisted that “Ghana must do whatever it takes to ensure the review of this unfair contract.”

By Selorm GBORBIDZI, Accra