The CEO of Dalex Finance, Joe Jackson, has rejected calls for fuel tax cuts and broad financial aid, cautioning that such measures could worsen Ghana’s economic outlook.
Speaking on Joy News on Thursday, Mr Jackson emphasised that rising energy costs could trigger broader inflationary pressures, particularly in food prices. He noted that the cost of food — even locally grown produce — already incorporates up to 40% in logistics.
He cautioned that higher fuel and transport costs would drive up food prices.
“If fuel and logistics costs rise, we will eventually feel the impact, especially on food,” he said.
Mr Jackson added that both local and imported food prices would be affected by global cost increases.
“Now, even if the food was imported, remember that the cost per container has gone up. Insurance and transportation costs have gone up. So any which way, we are between a rock and a hard place where food prices are concerned,” he explained.
He further noted that the current low levels of inflation could make the impact of these shocks even more severe.
“The worst part is the very low levels of inflation we’ve been having over the last few months will make the way we feel this effect worse,” he said.
“Because when inflation is high, any shock is somewhat absorbed and expected. But when inflation is low, the effect is harder and feels more painful.”
Mr Jackson warned against panic-driven policy responses, stressing that poor policy choices could inflict more pain than the shock itself.
“If we lose our discipline and don’t keep the macroeconomic numbers right, the pain we will have after reacting — or overreacting — to this shock could be worse than the shock itself,” he added.
However, he explained that government should prioritise targeted support rather than broad price controls. He recommended expanding TIP-free support for the most exposed households, the urban poor, low-income and transport-dependent workers, as well as food-insecure districts.
Mr Jackson also called for urgent action to stabilise food logistics.
“As food inflation rises, it is not because farm produce is less. It is because transport, storage and wholesale distribution have become more expensive,” he explained.
He urged the government to maintain macroeconomic stability, fiscal discipline, and controlled government expenditure, warning that any deviation could result in costs far higher than the initial shock itself.