Associate Professor at Andrews University, William Peprah, has expressed the need for government to store food produce from farms during peak seasons to avert the possibility of inflation.
According to him, because food is a critical driver of inflation, there is the need to take proactive steps and decision to forestall any hikes in the country’s inflation. He revealed that the August inflation rate should not only excite government, but also empower them to take necessary steps.
“This points to the fact that Ghana as a country should be able to store some food all year round to curtail the volatility in inflation rate. I was hoping that the government has already built about 1,000 warehouses across the country, and this is the time that we need to store some of the food products that we can and then release them onto the market in times of high inflation to be able to bring stable prices.”Prof William Peprah
Inflation dropped to 40.1% in August 2023, from 43.1% recorded in July 2023. Reacting to this, Prof Peprah indicated that this is “good news” for the country. However, he explained that per historical trend for Ghana in line with the country’s inflation, normally the month of August and September are the months that one can witness a reduction in the rate of inflation.
“This is because the line of production or farming cycle in Ghana, especially ends in the month of June-July. So, local food becomes available on the market in the month of August and early part of September. The more foods are made available on the market, you’ll see that prices begin to drop.
“You’ll see that this has been the trend for Ghana, so that is why we have seen that there’s a reduction in the growth of inflation rate. So, it’s not too much a surprising effect or impact, but because of the nature of Ghana’s farming season.”Prof William Peprah
Addressing food inflation
Per the statistics from the Ghana Statistical Service, Inflation for imported products registered a rate lower than that of locally produced items for the first time this year. With this, Prof Peprah attributed the trend to the stability of the exchange rate.
“On that side too, we can also remember that we have had a steady stabilization in the exchange rate. It has hovered around GHC11 and GHC12 to $1. So, as it becomes stable like that, it causes a reduction in the prices of imported items.
“So, that is why we are also seeing that impact. Remember, we have always been advocating that when we have a relatively stable exchange rate regime in Ghana, you see our exchange rate dropping….”Prof William Peprah
Commenting on how to address the rise in locally produced items, Prof Peprah emphasized the need for government to stock its constructed warehouses with farm products. He explained that by way of this, it will water down the impact of hikes in food inflation when there are shortages of food in the country.
“More funds should be made to the Buffer Stock Company to be able to purchase a lot of foodstuffs and store them and release them onto the market in times that they are not available. I’m not sure that onions and other vegetables are going to be a challenge because of the conflict in Burkina Faso and Niger. Strategically, the government must be able to take steps to address this issue, when it gets to the time that they’re needed, it’s going to drive food inflation…”Prof William Peprah
Government Statistician Professor Samuel Kobina Anim announced the figures on Wednesday, September 13. He noted that locally produced items were 42.4% while inflation for imported items was 36.2%.
That notwithstanding, Prof Anim revealed that the decline in inflation was welcome news, although it was too early to ascertain whether it will be a sustained trend.