Adnan Adams Mohammed
Some key stakeholders of the Ghanaian economy have taken a swipe at traders for their delay in reducing prices of goods and services to align with the current appreciation of the local currency, the Cedi.
This follows a 60-day grace period given to traders by the Ghana Union of Traders Association (GUTA), after a high-level meeting with the Minister for Trade and Industry, Elizabeth Ofosu-Adjare, to reduce prices of goods and services in the country. But, the two month grace period has been criticised as too long a time of allowing extortion of consumers by traders.
In recent weeks, the cedi has shown marked resilience, reversing years of depreciation — a development that has reignited public expectations for downward price adjustments, especially for imported goods.
”Well it’s justified to some extent”, Professor Peter Quartey, Director of Institute for Statistical, Social, and Economic Research (ISSER) said while commenting on demands by consumers on traders to reduce their prices.
“Anytime the exchange rate depreciates quickly traders increase prices but as soon as it appreciates then there is some sluggishness in reducing prices but we also appreciate the fact that some have imported using the old exchange rates.”
Also, the West African Regional Director of CUTS International, Appiah Kusi Adomako has argued that the 60-day window is overly generous to businesses and unfair to consumers.
“The 60 days is a bit generous to businesses, but to the consumers, I don’t think it is fair, because anytime prices go up, the cedi begins to fall badly. We can even see prices jumping three times in a day. And sometimes people even use the predictive prices of the cedi to the dollar to sell their goods in the market,” Mr. Appiah Adomako Kusi said.
He stressed that businesses often increase prices instantly when the cedi depreciates, sometimes even based on projected exchange rates, and therefore should not delay reductions now that the currency is gaining value.
He acknowledged that some businesses may still be selling old stock or clearing goods at the ports, but cautioned that new goods arriving after May 15 should not exploit the 60-day grace period.
“Now that the cedi has started to appreciate in value, I think it will be fair that businesses should gradually reduce prices as the cedi appreciates. So that by the end of the 60th day, we should be able to get full benefits coming to consumers.
“I think it’s also fair for the consumer to ride on the gains of the cedi against the dollar.”
Meanwhile, General Secretary of the Food and Beverages Association of Ghana, Samuel Ato Aggrey, has expressed optimism that ongoing market forces will compel traders to reduce prices of goods within the next 60 days, owing to the strengthening Ghana cedi and mounting public pressure.
Ato Aggrey, in an interview last week explained that as some businesses begin to reflect the cedi’s recent appreciation in their pricing, competition will naturally push others to follow suit or risk losing customers.
“We are hopeful that within those 60 days, the prices will change. Some of them have already started seeing the effect. If you go to the market and do your survey, you will know that some of the prices of goods have come down,” he said.
“By 60 days, we are going to see uniformity in the prices of goods, because what will happen is that those who will be reducing their prices will create a lot of competitive atmosphere in the market. Therefore, if your goods are still selling at a high price, you will be forced to reduce them.
“If you are not careful, and you say you’re going to maintain your old price, you are going to create an atmosphere of competition that will go against you,” he warned..
The Minister for Trade, Industry, and Agribusiness, Elizabeth Ofosu-Adjare, after a closed-door meeting with key business groups, including the Ghana Union of Traders Association (GUTA), the Association of Ghana Industries (AGI), and the Food and Beverage Association of Ghana (FABAG), said that the government cannot compel traders to reduce prices, despite the recent appreciation of the Cedi and easing inflation.
According to her, Ghana’s liberalised market system limits the government’s ability to enforce price controls, making dialogue the most viable path to achieving relief for consumers.
She revealed that some manufacturers have already indicated a willingness to reduce prices in response to recent macroeconomic gains such as a stronger Cedi and declining inflation
“The meeting has been fruitful and we have said that the government does not have the power to control prices, but it has the power to negotiate with our stakeholders to ensure traders, manufacturers, and consumers to ensure that they take advantage of opportunities when they happen.
“I am happy to inform you that the direct importers have agreed to reduce their prices, some have already started that. We have also heard from GUTA and AGI that it is good that the Cedi has stabilised but they need a bit of time for it to reflect in the prices. It will happen gradually,” she stated.
