Cedi Appreciation to Reflect in Market Prices Soon – GUTA President
President of the Ghana Union of Traders Associations (GUTA), Dr Joseph Obeng, says consumers should expect a reduction in prices of goods in the coming days, following recent gains made by the Ghana cedi against the US dollar.
Speaking on TV3’s KeyPoints programme on Saturday, May 17, Dr Obeng noted that the local currency’s stability and appreciation have allowed retailers to make significant forex gains, which are expected to reflect in market prices.
“I think we have gotten quite a significant gain that will start reflecting in the market soon. At least we have stability for some time before the sharp decline in the value of the dollar in favour of the cedi,” he stated.
Dr Obeng observed that market forces will compel traders to adjust prices downward as competition increases. According to him, traders who refuse to reduce their prices will be pushed out of the market by others who adjust in line with current exchange rate movements.
“If even you are a retailer, by now you should have even sold some of your goods. All that I am saying is that if you sell some of your goods and buy new ones, you strike a reasonable average so that you are not pushed out of the market,” he explained.
However, the GUTA President advised consumers to manage expectations regarding the pace and extent of price reductions. He stressed that while the cedi’s strength is critical, it is not the sole determinant of commodity prices.
Dr Obeng highlighted structural challenges such as increased utility tariffs and inefficiencies in the Value Added Tax (VAT) system as major impediments to significant price cuts.
“The strength of the cedi alone cannot act in isolation. It should be tied up to the VAT. We need to have the VAT reforms because there is a cascading effect and all that,” he said.
He also urged the government and the Public Utilities Regulatory Commission (PURC) to review utility tariffs in light of the cedi’s appreciation.
“One reason they [PURC] cited for the increase in tariffs was forex-related pressures. Now that the dollar is depreciating, they don’t have any reason to maintain the hikes, otherwise it negates any gains we are making. We have to check all these and not place the burden on the importer alone,” he added.
The cedi has shown signs of recovery in recent weeks, attributed to both local policy initiatives such as the Gold4Oil programme and favourable global economic conditions, including the weakening of the US dollar.
