Cedi Still Strong, Harvest Impressive, But Why are Ghanaians Agitated Over High Prices of Food?

“Before the dollar went up to 16. Most restaurants had food plates around 40-45 cedis. Then, in the forex crazy, when the cedi lost so much ground. Most restaurants went to 60-80 cedis. Higher-end places went from around 120 to between 240 and 480 cedis.  The dollar came down, but the food got stuck there. We are paying too much for food,” this is a Facebook post of Oliver Barker Vormawor, a well-known social activist expressing his frustration over the price of food.

Active users of social media can testify that his sentiments mirror those of many other Ghanaians who have taken to social media platforms to express their frustrations over the current cost of food.

The Minister for Food and Agriculture, Eric Opoku, received a fair share of bashing on social media after he made a comment that food is now cheap in Ghana. Some social media users questioned if he was indeed meant this Ghana or a different Ghana.

For every living soul, food is not a luxury. It is a basic necessity. It is something everyone must buy daily, whether from chop bars, street vendors, or market stalls. It is something that people need on a daily basis for survival, and hence it explains the frustrations expressed publicly.

Why Ghanaians Expect Food Prices to Drop Significantly

At least two conditions make the expectations for price reduction of food valid. The first reason is the significant appreciation of the local currency. The strengthened cedi is expected to result in the reduction of goods and services, including food.

Shamefully, an agrarian economy like Ghana is still not food sufficient, and hence a significant volume of the food consumed in the country is imported. Simple ECO 101 teaches that a strong local currency, in this case the appreciated cedi, makes imports cheaper. Hence, Ghanaians are right to expect a price reduction in food.

Take this recent post from social activist Oliver Barker-Vormawor for instance. He recalls that before the cedi’s plunge last year, a restaurant plate cost about ₵40–45. When the dollar shot up and the cedi tumbled, prices doubled to ₵60–80, and in fancier places, meals jumped from around ₵120 to as much as ₵480.

Now, even though the cedi has bounced back, those prices remain stuck at the higher levels.

The second reason that makes the expectation of a price reduction of food valid is the current harvest season. Given the seasonality of Ghana’s agriculture, some food items are in season and hence in abundant supply. For instance, food items such as yams, tomatoes, plantain, and onions, among others, are in season.

At least, we have some farmers who have come on social media to beg for buyers because the food items are rotting on their farms. This resulted in a governmental intervention when the presidency directed that the National Buffer Stock Company buys from these farmers.

Despite these situations, ordinary shoppers echo the same frustration that food remains expensive no matter what the cedi is doing. People wonder why a bumper harvest and a stronger currency aren’t showing up in their market baskets.

Why the mismatch?

Economists and farmers point to several factors to explain this mismatch. Transport and fuel costs come up strongly in this argument. Even if the cedi gains, fuel prices and the bad nature of roads make moving food from farms to markets still costly, and traders pass this on to consumers.

Also, the issue of middlemen and speculation plays a very critical role. Before the food gets to your plate, it goes through several hands. Each layer, wholesalers, transporters, and retailers, adds a markup which are arguably exorbitant. Even some farmers complain that the margins these middlemen earn are far explosive than what those who toiled to produce.  Sometimes, speculative traders hold back stock to drive up prices.

Moreover, storage and post-harvest losses are partly to blame. Ghana loses a large share of its harvests due to poor storage. Farmers may produce plenty, but by the time it gets to the city, most of them might have gone bad, probably due to the time spent on the road as a result of the poor road network, hence pushing prices up.  

There is also an economic principle known as sticky pricing. In Ghana, prices tend to go up quickly but hardly ever come down with the same speed. Once consumers get used to paying more, sellers often leave prices unchanged. This explains why the kenkey seller is not willing to reduce the price despite how significantly the prices of maize have reduced.

What Can Be Done?

Many agric experts have consistently argued that the country can fix this. For them, Ghana needs to fix the structural issues behind food pricing, not just rely on cedi gains or harvest surpluses.

They call on the government to invest in storage and processing so more of the harvest makes it to market without waste. There is also a need to improve roads and transport systems to cut distribution costs.

In addition, there is a call to strengthen competition in markets to reduce speculative mark-ups, while tracking and enforcing fair pricing in cases where traders exploit forex changes unfairly.

The Bottomline

In the long term, these steps could help ensure that bumper harvests and currency stability actually translate into lower prices for ordinary people.

But for now, the irony persists. Though the cedi may be stronger, the farms may be producing more, but for the average Ghanaian, this is not reflecting on their plates.

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