A Senior Lecturer at the University of Professional Studies, Accra (UPSA), Dr. Eric Boachie-Yiadom, says the continued increase in fuel prices at Ghana’s pumps reflects persistent structural weaknesses in the economy.
He warned that the trend could shift inflationary pressures toward imported goods and deepen the burden on households and businesses.
Speaking in an interview with 3Business on August 5, Dr. Boachie-Yiadom argued that the latest fuel price adjustments indicate that the country’s underlying economic fundamentals remain largely unchanged.
According to him, Ghana continues to face structural challenges that leave the economy vulnerable to external shocks, particularly fluctuations in global crude oil prices and exchange rate pressures.
“The recent hikes in fuel prices reveal that nothing much has changed in the economy. They expose the fundamental challenges we continue to face,” he said.
Dr. Boachie-Yiadom explained that fuel prices are influenced by three main factors: taxes, the exchange rate, and global oil prices. While international oil prices are beyond Ghana’s control, he noted that domestic policies can influence taxes and exchange rate stability.
He stressed that a stronger cedi would serve as a buffer against external shocks, reducing the impact of rising global oil prices on consumers.
“If we had a stronger cedi acting as a shock absorber, we would not be feeling the impact we are experiencing currently,” he stated.
The economist cautioned that if fuel prices continue to rise, inflationary pressures could increasingly be driven by imported goods rather than locally produced items.
He noted that the most recent inflation figures were largely influenced by locally manufactured goods, but warned that the trend could soon change because Ghana imports a significant share of the products consumed in the country.
“If this trajectory continues, we expect the prices of imported goods to increase. The last inflation report was driven mainly by locally manufactured goods, but imported goods could become the major driver if current trends persist,” he added.
Dr. Boachie-Yiadom called for long-term structural reforms instead of short-term interventions, arguing that injecting more dollars into the market would not provide a sustainable solution.
He further urged the government to invest in strategic sectors capable of generating foreign exchange and strengthening the economy’s capacity to supply the dollars needed to support business activities.
The economist maintained that addressing these structural challenges remains critical to stabilising the economy, containing inflation, and reducing the impact of future external shocks.
Meanwhile, fuel prices in Ghana have recorded several upward adjustments in recent pricing windows, largely driven by movements in global crude oil prices, exchange rate fluctuations, and taxes within the petroleum pricing structure.
The increases have raised concerns among businesses and consumers, as higher transport and energy costs often translate into rising prices of goods and services, with broader implications for inflation and the overall cost of living.
By: Coffie Mawuedem Noel
