GHANA-ECONOMY: HIGHER FOOD BILLS REFLECT RAMPANT INFLATION

By IPS Correspondents Reprint | | Print |

VINCENT NWAMMA

ACCRA, Nov 19 1994 (IPS) - SPIRALLING INFLATION HAS HIT GHANAIAN FAMILIES HARD, WITH FOOD ITEMS ACCOUNTING FOR MORE THAN ONE- THIRD OF ALL INCREASES IN THE NATIONAL CONSUMER PRICE INDEX (CPI).

FIGURES FOR SEPTEMBER, THE LATEST AVAILABLE FROM THE DEPARTMENT OF STATISTICAL SERVICES, SHOW THAT THE CPI HAD RISEN BY 26.1 PERCENT SINCE SEPTEMBER 1993 WITH FOOD PRICES MAKING UP 36.9 PERCENT OF THE INCREASE.

THIS IS A DEPARTURE FROM THE SITUATION THAT OBTAINED AT THE START OF THE 1990S. IN MAY 1991, A 19.8-PERCENT RISE IN THE CPI WAS DUE LARGELY TO INCREASED TRANSPORT AND COMMUNICATION COSTS, BUT SINCE THEN, FOOD PRICES HAVE ACCOUNTED FOR INCREASINGLY LARGER PORTIONS OF THE OVERALL BURDEN ON THE CONSUMER.

THE RISE IN FOOD PRICES HAS BEEN BLAMED ON THE GENERAL INFLATIONARY TREND IN THE ECONOMY.

“FARMERS HAVE TO SELL THEIR PRODUCE AT HIGHER PRICES SO THEY CAN MEET THEIR OWN NEEDS,” SAYS IMORU SEIDU, A SOYA BEAN AND GROUNDNUT FARMER BASED IN WA, WESTERN GHANA.

SEIDU, WHO CAME TO ACCRA TO SELL HIS PRODUCE, SAYS THE PRICES OF AGRICULTURAL INPUTS AND EQUIPMENT HAVE RISEN ON THE COUNTRY’S DEREGULATED MARKET. SIMILARLY, FARMERS SELL THEIR GOODS AT MARKET-DETERMINED PRICES.

“THERE USED TO BE PRICE CONTROL, BUT NOW YOU CAN SELL YOUR GOODS AT WHATEVER PRICE YOU LIKE,” SAYS SEIDU, WHO TOLD IPS THAT THE PRICE OF A 50-KG BAG OF SOYA BEANS INCREASED BY 25 PERCENT BETWEEN 1992 AND 1993, FROM 16,000 CEDIS (ABOUT 16 U.S. DOLLARS) TO 20,000 CEDIS (20 U.S. DOLLARS).

“THIS YEAR, WE EXPECT 23,000 CEDIS (23 U.S. DOLLARS),” HE ADDED.

DESPITE MEASURES TAKEN SO FAR TO RAISE AGRICULTURAL OUTPUT SEIDU SAYS PRODUCTIVITY IS STILL LOW PARTLY BECAUSE FARMERS PRACTISE MIXED CROPPING RATHER THAN SPECIALISATION.

HE ALSO BLAMES TECHNICAL PROBLEMS AND NATURAL FACTORS SUCH AS IRREGULAR RAINFALL WHICH HURT CROPS SUCH AS RICE.

THE RISING INFLATION HAS ALSO BEEN BLAMED ON MACRO-ECONOMIC FACTORS LIKE THE DEPRECIATION OF THE CEDI AND GOVERNMENT’S EFFORTS TO COVER BUDGET DEFICITS.