The Vice Chairman of Dr. Mahamudu Bawumia’s campaign team, Hon. Nana Akomea, recently shared an in-depth account of the State Transport Corporation’s (STC) performance and challenges from its golden years in 2017 to the present day.
His statements offered a comprehensive overview of the corporation’s rise and struggles with Ghana’s fluctuating macroeconomic environment, drawing significant attention to the importance of macroeconomic stability for national development.
Hon. Nana Akomea said the STC experienced a “golden period” between 2017 and 2019. During these three years, the macroeconomic environment in Ghana was relatively stable, leading to increased profitability and operational efficiency for the corporation. “We introduced free meals on our buses. We had a new fleet.”
Our margins were good because our costs were constant and low,” Nana Akomea explained, indicating that low inflation, stable fuel prices, and a relatively strong cedi significantly contributed to STC’s success.
This stability enabled STC to maintain competitive pricing while offering high-quality services, positioning itself as “the best transport company for the first three years.”
Introducing free meals on buses and acquiring a new fleet were among the corporation’s innovative steps to enhance customer satisfaction and operational excellence.
The Banking Crisis and COVID-19: A Double Blow
However, things took a drastic turn in 2020 with the advent of the COVID-19 pandemic and the banking sector crisis. Hon. Akomea highlighted that the banking sector crisis resulted in the loss of significant corporate investments. “We lost millions of cedis that we had put aside,” he revealed, citing approximately GHS5 million.
This was a severe blow to STC, as the funds had been invested in a financial institution that collapsed during the banking sector clean-up, and, to date, the corporation has not recovered those funds.
Adding to these challenges, the COVID-19 pandemic further crippled STC’s operations, as francophone borders—through which a significant portion of their business flowed—were closed.
“One-third of our business comes from the francophone business. We have terminals in Abidjan, Ouagadougou, Lomé, and Cotonou, and we are one of the biggest carriers ferrying people from [these]and back .”
Hon. Nana Akomea Vice Chairman of Dr. Mahamudu Bawumia’s campaign team
The closure of these borders for three years resulted in substantial losses, with the Abidjan terminal alone previously generating enough revenue to pay salaries.
The Impact of Fuel Prices and Currency Instability
As if the loss of francophone business wasn’t enough, the macroeconomic instability during this period exacerbated the situation. The constant devaluation of the cedi and the escalating price of fuel further drove up the corporation’s operational costs. He noted; “At the height of the crisis during COVID, fuel went to 62% of our cost.”
He explained how a typical bus trip to Kumasi saw the majority of revenue being used to cover fuel expenses. This sharp rise in fuel costs, along with the soaring prices of spare parts, rendered the company’s operations nearly unsustainable. “We were barely able to just stay afloat,” he added.
To put it into perspective, in the period from 2017 to 2019, fuel accounted for only 27% of STC’s operating costs.
However, by 2020, this figure had risen to 62%, leaving little room for profit. The volatility of fuel prices directly impacted the corporation’s bottom line and raised serious concerns about its ability to maintain its services in the long term.
A Glimmer of Hope: Emerging from the Crisis
Despite these significant challenges, Hon. Akomea expressed cautious optimism about the future.
“Now the macro situation is relatively stable, thank God, we are coming out of the hordes the Cedi is relatively stable as compare to the period between 2020/2023, inflation is coming down, prices of fuel are a bit more stable but the problem now is about fleet… The biggest problem that we have now is to get a new fleet to be able to take advantage of the more stable macro environment.”
Hon. Nana Akomea Vice Chairman of Dr. Mahamudu Bawumia’s campaign team
The corporation has sent delegations to various bus manufacturers and is in the process of negotiating financial packages that would allow it to acquire new vehicles. “We’re hoping that we’ll be able to get some of the new fleet in before Christmas,” he added.
Lessons in Macroeconomic Stability
In reflecting on the journey of STC, Hon. Akomea pointed out a critical lesson: the importance of macroeconomic stability for national development.
“One thing that our operations have taught me—and I hope that every politician [learns the same lesson] —is that macro stability is non-negotiable if you want your country to grow.”
Hon. Nana Akomea Vice Chairman of Dr. Mahamudu Bawumia’s campaign team
He contrasted the situation in Ghana with that of the francophone countries, where a common currency, the CFA, has provided a stable economic environment. This stability has insulated businesses in these countries from the severe cost fluctuations seen in Ghana during periods of cedi depreciation and fuel price volatility.
Hon. Nana Akomea reflected drawing from the parallels of the European Union’s adoption of the Euro.
“Even they [Europeans] found that if they didn’t have a common currency and a single market, they weren’t going to survive the competition from the Far East—Japan, China, and Korea.”
Hon. Nana Akomea Vice Chairman of Dr. Mahamudu Bawumia’s campaign team
This he emphasized implies that Ghana and its West African neighbors should consider similar integration efforts, such as the long-discussed but unrealized Eco currency, to ensure future economic resilience.
The story of the State Transport Corporation underlined the inextricable link between macroeconomic stability and the health of businesses in Ghana. While the corporation enjoyed a golden period between 2017 and 2019, the twin crises of COVID-19 and the banking sector collapse revealed its vulnerabilities.
As Ghana’s economy begins to stabilize once again, STC’s ability to rebound will depend largely on acquiring new assets and maintaining cost efficiency.
However, as Hon. Nana Akomea emphasized, long-term success hinges on maintaining a stable macroeconomic environment—a lesson that Ghana’s policymakers cannot afford to ignore.
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