Some traders at the Dome Market in Accra have admitted to overpricing their products in order to stay in business in the wake of the current economic crisis.
They disclosed this during an interaction with the Independent Ghana’s Jessie Ola-Morris, who paid a visit to the market. The visit followed speculation that some traders are taking advantage of the economic crisis to price their products at exorbitant rates in order to make more profit.
Ghana’s economic woes continue to worsen unabated, despite various measures taken by the government to curb inflation and mitigate the hardships. Inflation remains high, and the prices of fuel and other essential commodities continue to surge.
A (25-litre) gallon of vegetable oil, which was selling for GH¢360 at the beginning of the year, was increased to GH¢600 in October and is now going for GH¢1,000 and over.
A bag of 5kg rice which was previously sold at GH¢40 at the beginning of the year is now GH¢105 and above.
Latest statistics from the Ghana Statistical Service indicate that the national Consumer Price Inflation (CPI) for the country reached a startling 40.4 percent rate in October 2022.
The hikes in fuel prices and the poor performance of the cedi against major currencies are the main contributing factors to the hikes in food prices.
As an import-driven economy that largely relies on international currency such as the U.S dollar ($), demand for such currencies has peaked in recent times, weakening the local currency (i.e the Ghana Cedi).
The dollar, which used to sell at GHC5.87 at the beginning of the year, is now selling at GH¢113.11 (interbank rate) and GH¢114.85 at the forex bureau.
Amidst the hardships, traders have been accused of compounding the woes of the ordinary Ghanaian by overpricing their products in order to make enormous profits.
During a visit to Dome Market, some traders refuted the claim, however, others also conceded to overpricing their products in order to stay in business.
A baby diaper retailer, Auntie Yaa, who asserted that traders are not to blame for the development, explained factors that largely affect the pricing of products.
She used herself as an example to demonstrate how the cost of transportation heavily influences her pricing strategy.
Auntie Yaa mentioned that she buys a pack of diapers at GH¢100 from the wholesale shop and slaps an amount of GH¢10 on each pack to cover the operational cost, which includes the cost of transport and other expenses involved in getting the products to their final destination (i.e the Dome Market).
“[After] I deduct these expenses from the GH¢10 I’m able to make a profit of GH¢5 from each pack, then I’m okay,” she said.
She was however baffled over the fact that the prices of the products are not stable on the market: “You make a purchase today and the next day you go back to the market to buy the same product and the price has shot up drastically, that disturbs us a lot,” she lamented.
Her other concern was with how some traders hoard their products and sell them later at exorbitant prices when demand is high. She, thus, called on the government to implement measures to curb such activities.
Another trader, Mary Oforiwaa, did not mince words about the fact that some unscrupulous traders are taking advantage of the free market to overprice their products.
“Undoubtedly, times are hard and when we lament we are told Ghana is not the only country facing an economic crisis but I think we traders are part of the problem. We are doing what we like. Even with transportation that is regulated by GPRTU, every driver has his (/her) own fare they charge, so the government is not solely to blame for the hardships. And with traders, we also price our products how we like,” she said.
Proposing a solution, she called on the government to implement a strategy adopted by the Rawlings regime. Recall that during the Rawlings administration some traders hoarded their products with the intention of selling them later at higher prices when the demand was high.
However, the former President found this out, went for the products and conducted a clearance sale on them. Going down memory lane to her
youthful days, she mentioned that “growing up I witnessed the Rawlings regime and during that time, if you hoard your products with the intention of selling them later at an outrageous rate, Rawlings comes for the goods and sells them cheaply – ‘Donkomi’ (to wit clearance sale) – but this government has been dormant in this regard and as a result, everyone is doing what they like.
“But I believe things will go according to how it’s supposed to be when the government adopts the late former president’s strategy. There are traders who also have to consult other traders before they issue prices for their goods, and all these are not helping,” she lamented.
Kwabena Asiedu Nketiah, the third trader who spoke to the Independent Ghana, acknowledged that he prices his products at exorbitant rates, however, he
attributed the development to the cedi-dollar depreciating rate and gross economic mismanagement by the government.
“Looking at the rate at which prices of products are increasing these days it’s above normal but then the dollar-cedi rate affects the prices. We import the products with dollars, so when the cedi falls against the dollar, the prices of our products also go up,” he added.
Additionally, he explained that overpricing the products was the only way to stay in business. According to him, traders risk losing their capital if they do not
toe this line.
“With business, it is wrong to wait for your old goods to finish, go for another one before you increase the price of your products. You’ll run at a huge loss if you do that.
“The moment you hear of a price increment, you instantly have to adjust your prices to the new rate otherwise, you’ll collapse your business,” he said.
Ghana operates a free market. A free market is one where voluntary exchange and the laws of supply and demand provide the sole basis for the economic system, without government intervention.
A key feature of free markets is the absence of coerced (forced) transactions or conditions on transactions. Consequently, traders largely decide how their products are priced.
We (the Independent Ghana) discovered that some traders are taking advantage of Ghana’s liberal market to overprice their
products.
To curtail this, Martha Ofosuhemaa, another trader, suggested that the government should be keen on consulting manufacturers and market women regarding
regulating the prices of products on the market.
She believes the solution to addressing the exorbitant rates at which goods are priced largely lies with manufacturers and market women.
If the prices of every product are embossed on its packaging, this will significantly help in regulating them to make them affordable, she noted.
“Take coke for instance, if the manufacturer writes on the label that the small bottle should be sold at GHC 3.50 pesewas, we traders will go for it and know that that is how we are supposed to sell it so
we will,” she said.
“Government should also speak to the market women. I believe if such consultations and negotiations are held regularly, the prices of products on the market will drastically reduce,” she added.
Overpricing in one sector of the economy affects all other sectors since they are interrelated.
Astronomical hikes in fuel prices influence transport fares, which in turn affect the prices of products on the market. This comes back to bite the ordinary Ghanaian since it escalates the cost of living.
Consequently, Ghanaians continue to lament over the hardships and have on various occasions appealed to the government to roll out measures to check these developments on the market.