The Food and Beverages Association of Ghana (FABAG) has attributed the sharp decline in retail sales and tax revenues from the sector to the consistent increases in utility tariffs by the Public Utilities Regulatory Commission (PURC).
According to the Association, the rising cost of electricity and water has forced many businesses to cut down production, significantly reducing profit margins and pushing several operators to the brink of collapse.
Their concerns follow a recent Bank of Ghana report which revealed that taxes from retail sales have not improved since the start of the year.
Speaking to Joy Business, the Chairman of the Association John Awuni urged government to reconsider the frequent tariff adjustments to ease the burden on local businesses.
“The tariff hikes by the PURC are going to affect businesses and worsen the situation because sales in the market have dropped by as much as 70 percent,” he said.
He added that the Bank of Ghana’s report confirmed what businesses have long been experiencing, noting “It appears that everything is at a standstill in the market. This is for the food and beverages sector and we all know food is a necessity. If you open your restaurant, hotel, or shop, display rice, sugar, and drinks, and at the end of the day nothing is sold, then the situation is dire,” he lamented.
The Chairman further questioned the impact on other sectors of the economy if food, which is a basic need, is struggling to sell. “If this is really the situation for food, then my question is, what is happening to the non-food sector?” he asked.
The Association has called on government to urgently review utility tariffs in order to protect jobs, safeguard local businesses, and stabilize the retail market.
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