Economist and Senior Research Fellow at the Institute of Fiscal Studies, Dr. Said Boakye, has blamed the high cost of living in Ghana on the country’s voracious appetite for imported products.
Dr. Boakye made the remark on the Citi Breakfast Show on Tuesday, on the back of a report that Ghana has been ranked as one of countries in the world with the highest cost of living.
The report by MoveHub factored the price of groceries, transport, bills, restaurants and renting a home into its calculations using New York as the benchmark.
Sharing his expertise on the issue on the Citi Breakfast Show on Tuesday, Dr. Boakye explained that, the high cost of import duty and transportation accounts for high cost of products in the country.
“Many of these items are not produced over here, they are imported and there is so much high cost of transportation. In US too, there is something similar, but the advantage America has is that, they import in large quantities and they have cost advantage. We import in bits and there is so much transportation cost involved. When you get over here, you add profit margin and particularly the cost of duty. When all these things are added, it makes prices of products which would have been bought relatively cheaper rates in USA, more expensive in Ghana.”
When asked by host of the Citi Breakfast Show, Bernard Avle, about whether traders were not seeking to make extreme profit hence the high cost of products, Dr. Boakye said such was not the case.
“When it comes to profiteering, I don’t believe in that. The seller is able to do so when the conditions are conducive for that; you can’t just price anything that you want. Perhaps, if profit margins are higher, then it means there is a little competitiveness and there is some form of monopoly power in the system. But that might not be so much apparent, after all, many others are also importing. What is adding considerably to the cost is the cost of duty and transportation,” he stated.
He further categorized Ghanaians into two saying there are the “haves” who live by international standards and “non-haves” who live in ghettos.
He lamented that, those who live by international standards pay exorbitant prices for rent as compared to the “non-haves.”
“In Ghana, the society is divided basically into two; the haves, those who live in international setting, and non-haves who live in ghettos. Those who live in apartments of international standards, the rents they are pay are very high. Those who live in cantonments and surrounding areas, some charge in dollars. Of course New York and other places are very expensive, but if you move to other places in the United States, they are less expensive compared to rents that are charged in Cantonments, Osu and other places in Ghana.”
What should be done?
He said to change the trend; Ghanaians should be encouraged to do more domestic production.
“Domestic production is also costly, costly in terms of energy which is very high. When you want to manufacture, you also need to import machinery. All these make cost of local production very high. It is not that we love imports; it means cost of manufacturing is very high,” the research fellow added.
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(Via: CitiFM Online Ghana)