The Ghana National Chamber of Commerce and Industry (GNCCI) aims to reduce energy-related business expenditures to 20% of total operating costs. This initiative seeks to boost business competitiveness, lower production costs, and strengthen Ghana’s industrial growth. Energy currently consumes between 30% and 40% of operating costs for many Ghanaian businesses.
Manufacturers face the steepest challenges from these high energy costs. The newly launched Energy and Climate Desk, a collaboration with GIZ, will support businesses. It will help businesses adopt more affordable and reliable energy solutions to tackle this significant economic burden.
This effort fits into Ghana's broader economic strategy to enhance local industries. High energy costs impede industrial growth and make Ghanaian products less competitive both at home and abroad. Reducing these costs will improve profitability for businesses and contribute to overall economic stability and expansion.
Mark Badu-Aboagye, the GNCCI Chief Executive Officer, stated high energy costs are a major obstacle to productivity. He noted that Ghana's electricity cost per kilowatt-hour is about 18 cents. In comparison, competing economies like China typically pay less than 5 cents. This cost difference puts Ghanaian businesses at a significant disadvantage in both domestic and international markets.
Mr. Badu-Aboagye also explained that increased energy prices raise production costs. These higher costs reduce profitability and weaken the ability of local firms to compete effectively. He emphasized that a substantial portion of these increased costs is transferred to consumers through higher prices for goods and services. A reduction in energy costs would therefore lead to lower production costs and, consequently, lower consumer prices.
The target of reducing energy costs to around 20% will not be achieved immediately. Mr. Badu-Aboagye described it as a process that will take time but remains a critical objective. He affirmed that the GNCCI is committed to reaching this goal to benefit both businesses and consumers.
The Energy and Climate Desk will provide practical support to help businesses cut energy costs and improve efficiency. This support includes conducting energy audits and offering capacity-building programmes. It will also assist businesses in accessing financing for alternative energy projects. A key focus will be promoting renewable energy sources, particularly solar power, recognising Ghana's substantial solar potential. This aligns with Ghana's trade ambitions under the African Continental Free Trade Area (AfCFTA) framework.
Raymond Ahiadorme, Component Manager for Sustainable Energy for Climate Protection at GIZ, highlighted the broader climate benefits. He stated that reduced energy costs increase profitability and lead to savings. These savings can be reinvested into business expansion, leading to job creation. He noted that businesses will thrive, and the economy will grow. Additionally, this initiative will help Ghana contribute to global climate action by working towards net-zero emissions by 2070.