Transporters to increase fares by 40% in Ghana

The Concerned Drivers Association of Ghana has given a hint of a possible 40% increase in transport fares in Ghana, effective from Monday next week. The drivers association has indicated that this increase is a result of the rise in the price of petroleum commodities, both on external and internal fronts. The internal economic factors within the country have also contributed to this decision. John Kennedy, the Managing Partner at Bespoke Business Consulting, shed light on the reasons behind this potential fare hike and its implications on the Ghanaian economy. Kennedy explained that the increase in fuel prices is a significant factor in the decision to raise transport fares. Despite Ghana's daily production of 120,000 barrels of fuel, the country exports it for refining and imports it back, resulting in increased costs. Additionally, the weakening local currency adds to the inflationary effect, affecting prices of all commodities, not just transport fares. The monetary authorities, particularly the Bank of Ghana and the MPC, are closely monitoring the situation to mitigate the potential inflationary impact. Kennedy highlighted the challenge of predicting the authorities' policies but emphasized the need for measures to stabilize inflation and protect investors' interests. With petrol prices seeing two increases in 2021 and remaining elevated, there are concerns that further hikes may be on the horizon due to high global demand for oil. This could have a domino effect on the overall economy, affecting household budgets and consumer spending. Kennedy suggested that the government could intervene by reducing taxes and levies on fuel to alleviate the burden on commuters. By cutting down on energy levies and other charges, the government could lower fuel prices and subsequently the transport fares. Such measures could help lessen the impact of the fare hike on households and stimulate economic activity. In conclusion, the potential 40% increase in transport fares in Ghana poses challenges to the economy, particularly in terms of inflation and reduced consumer spending. It is crucial for the government to consider policy interventions to cushion the impact on citizens and businesses. By addressing the underlying factors contributing to the fare hike, Ghana can navigate through these challenging times and ensure sustainable economic growth.