Finance expert, William Peprah, has revealed that the country is not yet out of inflationary pressures, following the rise in Ghana’s inflation for the third consecutive month, reaching a new high of 43.1% for the month of July from the previous mark of 42.5%.
According to him, the rise in inflation is largely influenced by food inflation, among other factors. He revealed that the increase in electricity cost has also had an impact on the general economy. Owing to these factors, he stated that they sum up the reasons why Ghana is witnessing a marginal increase in the inflationary rate at the moment.
“We are not out of the inflationary pressures yet. Cost of inputs from the world market is going up, we’ve also noticed that our currency has finally not come to its stabilization – we see a small increase in currency devaluations. Also, we noticed that when fuel prices reduced on the world market, there was not much reduction in the fuel cost which also kept the transport sector a little bit high. In fact, the farmers in Ghana, if you notice, they are also feeling the pinch of the high cost of living. So, they are also letting their prices reflect…”
William Peprah
From the food side, Mr Peprah noted that there’s also the talk that there might be shortage of rice. As a result, he stated that this will also have an impact on the rice importation, considering the Ghanaian public consumes a lot of rice.
“So, putting all these together, that’s why we see the food basket keeps on being the leader for inflation as compared to the norm for food items.”
William Peprah
Furthermore, Mr Peprah highlighted that because locally, Ghana is importing most of the food items it consumes, dog meat, for instance, which is imported like most product has also shot up. With this, he explained that aside the exchange rate evaluation, there’s also increase in taxes which causes the cost of the products to go high.
“Also, from the farmer’s perspective, we’re also seeing an increase in the farm inputs. So, definitely, they will also factor in the prices of the item that they also produce in Ghana… Also, you see that production itself is not as significant as it was in the past. Some part of the lands, because of the issue of galamsey, you will also see that it has the ripple effect that we are probably facing. As expected, we are also not seeing a lot of youth going into agriculture which is also affecting production.”
William Peprah
Addressing food inflation in the country
Commenting on the concerns of some traders exploiting the economic situation to make gains, Mr Peprah stated that such concerns may be true. To this, he noted that there is the need to find out from the Ghana Statistical Service the price it is getting from the farmgate as compared to the urban centers.
“If the price disparities are too wide, then it means the middlemen are really profiting from it. Remember the action government took some time back trying to move the products from the farmgates to the ministry to sell. Can we find out whether that is the real situation? If not, the middlemen may be profiting from the entire transaction, until government comes in with some measures or policies to address that issue…”
William Peprah
To address the issues, the finance expert called on government to strengthen its Planting for Food and Jobs Programme. He further expressed the need for government to visit farm gates, buy food produce, store and release them onto the market to beat down prices.
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