Transportation Costs Identified as Major Contributor to High Inflation, Says GSS
Rising Transportation Costs Identified as Key Driver of Food Inflation in Ghana
- The cost of transporting foodstuffs has been identified as a key factor driving inflation above 20 percent in 2024
- This increased transportation cost is typically passed on to consumers
- He proposed that through broader discussions with stakeholders, a more comprehensive strategy could be developed
The cost of transporting foodstuffs has been identified as a key factor driving inflation above 20 percent in 2024, according to the Ghana Statistical Service (GSS).
During a workshop reviewing the consumer price index variables, Simon Tichutab, a Data Scientist at GSS, explained that the rising cost of transporting food from farms to consumers has played a significant role in pushing up food inflation.
He highlighted that the transportation of produce, such as yam and cassava, from the middle belt to southern markets has resulted in steep price hikes. This increased transportation cost is typically passed on to consumers, thus contributing to the overall rise in food prices.
“In our data, fuel costs, and bus and trotro fares have been ranked about 70 times in the top fifteen factors of the 72 data points we reviewed,” Tichutab said. “Many food items, including unprocessed produce like yam, fresh tomatoes, and other farm products, are significantly affected.”
Tichutab called for a multi-stakeholder approach to address the high transportation costs, which he described as a major hurdle in managing inflation. He emphasized the need for a policy shift to effectively tackle the issue, particularly focusing on food prices and their impact on the inflation rate.
“It’s a complex challenge,” Tichutab noted. “If we want to curb inflation, we need to closely examine our food basket and its inflationary pressures.”
He pointed out that the trend of rising transportation costs and their impact on food prices has been ongoing for several years. This pattern indicates that addressing the gap between farmgate and market prices should be a priority.
He proposed that through broader discussions with stakeholders, a more comprehensive strategy could be developed to alleviate the issue.
The GSS shared these insights during a stakeholder engagement focused on reviewing the 2024 trends of consumer price indices and items driving inflation in Ghana. The engagement aimed to foster collaboration between government officials and the media to improve the accuracy of inflation calculations and better understand the complex factors contributing to consumer price inflation.
Key consumable items that have experienced the highest price increases were also discussed, as they constitute a significant portion of average household expenditure.
