"Opaque Pricing, Powerless Consumers: Ghana\u2019s Economic Challenge"

" Opaque Pricing, Powerless Consumers: Ghana\u2019s Economic Challenge \r\n\r\n \u201cPeople of the same trade seldom meet together, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.\u201d - Adam Smith \r\n\r\nOver the past month, the Ghanaian cedi has been on an impressive rebound (appreciated by approximately 24.1% ) against the U.S. dollar, signaling a potential relief for consumers battered by years of inflation, currency depreciation, and persistent price hikes.\r\n\r\nBut that hope has largely remained a mirage. Traders and businesses across the country have refused to allow the appreciating currency to reflect in reduced prices for goods and services.\r\n\r\nWhat should have translated into lower living costs has instead become a glaring display of a deep-rooted market distortion \u2014 one shaped by opaque pricing practices and weak consumer protection.\r\n\r\nThe Ghanaian economy is overwhelmingly informal, with an estimated 80\u201390% of businesses operating outside formal regulatory structures. Prices are rarely set through transparent mechanisms or market-driven competition.\r\n\r\nInstead, they often emerge from a mix of cost considerations, speculative instincts, and, increasingly, collective agreements by traders' associations. It\u2019s no surprise then that prices in Ghana are famously \u201csticky downwards\u201d \u2014 a term economists use to describe how prices rise quickly but fall very slowly, if at all.\r\n\r\n Pricing Without Logic: When Margins Become Excessive \r\n\r\nPricing of goods in our markets defies fundamental logic. The universally accepted pricing model is the cost of goods + cost of sales + profit margin, seems not to apply to Ghana\u2019s trade landscape.\r\n\r\nAnecdotal and empirical evidence suggest that some businesses apply profit margins that are sometimes three to four times the cost of goods.\r\n\r\nThis is not only exploitative but defies the logic of a competitive market, where average profit margins should reflect efficient costs and fair returns.\r\n\r\nThis pricing culture is enabled and, in some cases, institutionalized by trade associations also called \u201cChamber.\u201d These groups have, in practice, become informal price-setting bodies. They coordinate pricing strategies, resist competition, and aggressively oppose market entrants, particularly foreign traders.\r\n\r\nThe frequent skirmishes between GUTA and Nigerian traders is a case in point. Nigerian traders often sell goods cheaper than Ghanaian traders. GUTA\u2019s resistance to their presence is not driven by national interest, but by a desire to maintain price monopolies and suppress competition.\r\n\r\nTo further compound matters, GUTA is now advocating for a 60-day grace period before adjusting prices downward in response to the appreciating cedi. This is both unjustified and harmful.\r\n\r\nSome traders are currently clearing goods at exchange rates of GHC 11.80 to the dollar, but continue to price them as though the rate were GHC 15.\r\n\r\nLet\u2019s be clear: the moment trader associations start announcing across-the-board percentage price reductions \u2014 10%, 20%, or 30% \u2014 they have effectively crossed into the territory of price coordination, if not outright price fixing.\r\n\r\nIn a competitive market, pricing decisions should be made independently by each business. Any collective agreement undermines competition, distorts pricing signals, and harms consumers.\r\n\r\n The Cost of Cartelization: Cement as a Case Study \r\n\r\nCement pricing in Ghana is a perfect illustration of the entrenched dysfunction. Despite the cedi\u2019s appreciation, cement prices have paradoxically increased. This defies logic and economic fundamentals, raising serious questions about possible cartel behaviour in the sector.\r\n\r\nLast year, the then Minister for Trade and Industry attempted to regulate cement prices \u2014 a move that, while well-intentioned, missed the real problem. The issue is not the absence of regulation per se, but the lack of competition and oversight in key sectors of the economy. Misdiagnosing the problem only leads to ineffective remedies.\r\n\r\n A Market Without Guardians: Where Are the Consumer and Competition Laws? \r\n\r\nAt the heart of this pricing crisis is a systemic failure to protect consumers and uphold competition. Ghana still lacks a comprehensive Consumer Protection Act and an effective Competition Law. In their absence, there is no institutional mechanism to investigate anti-competitive conduct, sanction abusive pricing, or protect the average consumer from market manipulation.\r\n\r\nTrade associations have become so powerful, and the Ghanaian consumers have been left with no regulatory and legal safeguards.\r\n\r\n Best Practices and Solutions to Drive Prices Down \r\n\r\nIn the first place, the government must fast-track the enactment of the Consumer Protection Act and the Competition and Fair Trade Practices Act.\r\n\r\nThe recent announcement in the 2025 Budget Statement regarding the imminent passage of both laws is commendable. Without these two laws in place, the Ghanaian consumers will never get a fair deal in the marketplace.\r\n\r\n Consumer Protection and Competition \r\n\r\nAuthorities are empowered with investigatory, enforcement, and sanctioning powers similar to those found in jurisdictions like South Africa, the United Kingdom, and the European Union.\r\n\r\nThese countries have used competition law to expose cartels, challenge dominant firms abusing their market position, and drive prices down to benefit consumers.\r\n\r\nSecondly, the Ministry of Trade, Industry and Agribusiness and the Ghana Statistical Service (GSS) must enhance market transparency. The GSS should be tasked with monitoring and publishing indicative price ranges for essential goods.\r\n\r\nThis includes tracking products from port to market and factoring in import costs, taxes, and reasonable industry margins. Transparency helps correct information asymmetry, empowering consumers and deterring exploitative pricing.\r\n\r\nFinally, in markets where there is no competition to bring down prices, the government can spur competition by removing entry barriers and facilitating new entrants to help drive competition.\r\n\r\n Conclusion \r\n\r\nConsumers have been left voiceless for far too long. It is time for policymakers to rise to the challenge by passing strong legal frameworks, empowering institutions, and creating an economy where businesses compete fairly, prices reflect economic realities, and consumers get the value they deserve.\r\n\r\nBecause in the end, the health of any economy is measured not by the profits of the few, but by the welfare of the many.\r\n\r\n NB: The writer is a lawyer and a competition economist, and a consumer protection expert. He is the West Africa Regional Director of CUTS International. He can be contacted via email: apa@cuts.org or www.cuts-accra.org or 0302-254-5652. "

"Opaque Pricing, Powerless Consumers: Ghana\u2019s Economic Challenge"

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