Economist with Databank, Courage Martey, is asking government to put in measures, to boost domestic food production to bring the cost of food down in order to check the rising inflation rate in the country.
Food inflation was one of the main influencers for the recent rise in inflation in the country. The rate for February 2022 increased to 15.7 percent, representing a 1.8 percent jump in the rate compared to the 13.9 percent recorded in the first month of this year.
This new rise in the inflation rate confirms predictions by economists and stakeholders that prices of fuel and food will continue to rise following tensions between Ukraine and Russia.
Already, Ghanaians are bearing the effect of the tensions on the price of fuel, which in turn has led to an increase in transport fares.
The 15.7 percent increase in February was mainly influenced by housing, water, electricity and gas; transport, as well as food and non-alcoholic beverages.
Food inflation regained its dominance, recording 17.4 percent year-on-year inflation, as against the 13.7 percent recorded in the previous month, all above the national average of 15.7 percent.
February’s food inflation alone is higher than both last month’s food inflation (13.7%) and the average of the previous 12 months (10.8%).
Courage Martey, opines that this situation is only going to get worse if the situation between Russia and Ukraine does not die down.
In the meantime, he believes boosting domestic production of food will help keep the inflation rate in check.
“Given the fact that there’s significant food price volatility, the government may want to implement policies that improve on food productivity and within this context, it is a bit disheartening to read that government has slashed the subsidies on fertilizers under the Planting for Food and Jobs initiative. What that means is that farmers will now have to source for additional fertilizers at more expensive rates, and that will mean upward pressure on food prices in the near term.”
“We understand that the government would want to cut down cost in this difficult fiscal situation but we think that choosing this approach to cut cost might just be the wrong option in this situation. The government must rather invest in the area of domestic food production to substitute the more expensive imports that we’re likely to get from the rest of the world.”
CBN
