As the cedi continues to remain stable, in addition to a reduction in fuel prices, the ultimate benefit expected by Ghanaians remains elusive, as prices of goods and services, as well as transport fares, have not dropped.
Although some companies have announced price cuts to reflect the cedi’s gains, prices on the general markets have largely remained the same.
This has prompted the leadership of the Ghana Union of Traders Association (GUTA) to appeal to its members to reduce prices, although some of them have shown resistance.
Moreover, the Ghana National Chamber of Commerce and Industry (GNCCI) has also served notice that it will take time for consumers to feel the impact of the cedi’s stability in prices. The CEO of GNCCI says members are keenly watching the forex market to be sure that the cedi’s stability is not short-lived before reducing prices.
The Ghana Road Transport Coordinating Council (GRTCC) also says the reduction in prices in recent weeks is not sufficient to warrant a reduction in transport fares.
This signals that Ghanaians will continue to grapple with high transportation costs despite recent reductions in fuel prices and a stabilizing cedi.
Amidst this development is a growing chorus of voices demanding structural reforms to ensure economic gains are felt by the everyday Ghanaian.
Among these persons is the Executive Director of the Global InfoAnalytics, Mussa Dankwah, who is calling for the implementation of an Automatic Fare Adjustment Formula (AFAF) in Ghana’s transport sector, a model similar to what is already in place for petroleum pricing and utility tariffs.
The Automatic Adjustment Formula is a systematic and periodic pricing mechanism that automatically recalculates and adjusts prices based on key economic indicators such as fuel prices, exchange rates, inflation, and the cost of spare parts. It eliminates arbitrary pricing decisions by ensuring fare changes are data-driven, transparent, and timely.
For instance, in the energy and utility sectors in Ghana, the Automatic Adjustment Formula (AAF) is used by the Public Utilities Regulatory Commission (PURC) to review electricity and water tariffs quarterly based on input cost variables. Similarly, fuel prices in Ghana are adjusted under the Price Deregulation Framework, which reflects changes in global crude prices, forex fluctuations, and other market dynamics.
Based on this formula, Mussa Dankwah believes that applying this model to the transport sector would ensure commuters benefit promptly when fuel prices fall, as they have in recent months, and bear proportional costs when operational expenses rise.
In his view, the reasons of the GTRCC for failing to reduce transport fares cannot be justified, and hence, a replication of the AAF in the transport sector will be some of these “exploitations.”
“Maybe it is time to consider automatic fare adjustment formulae for the transport sector too,” Mr. Dankwah stated.
He explained: “If we have done this for the petroleum sector, it can be done for transport too, ensuring that the benefits of improving economic variables are passed on to the public. We can consider a range of variable changes when achieved, must automatically trigger fare adjustment. They can’t say the reduction in fuel cost is not significant enough to merit fares reduction.”
This approach, Mussa Dankwah says, would prevent unilateral decisions by transport unions and allow fares to be based on clear economic logic.
Transport fares have a ripple effect on the cost of living and doing business. When they remain high despite falling input costs, the burden on households and small businesses intensifies inflationary pressures. Implementing a fare formula could serve as a stabilizing mechanism, offering predictability for commuters and fairness for operators.
