Impact of transport fare on the cost of living

• Transport fares across the country are up by 13 per cent and the increment will take effect from Saturday, June 5, 2021

• The decision is in line with the administrative Arrangement on Public Transport Fares the Road Transport.

• The cost of living in the country could also be affected

The cost of living in the country could in the coming weeks follows the 13% increase in transport fares which will kick start this Saturday.

This could affect the living standards of Ghanaians especially the price of goods and services.

Looking at the structure of the economy, any marginal increase in transport fares could affect everything in the country.

GhanaWeb’s Amos Ekow Coffie takes a look at how the changes in transport fares could affect the prices of goods and services.

From Monday, June 5, the cost of some of the basic foodstuff from the farm gate to the markets are expected to increase. Most traders will then be forced to pass on this trade adjustment to consumers. This should mean that the spending budget for some of these items will go up.

The increase will not only affect foodstuff but some raw materials used by industries for production; a move which could also affect the cost of doing business in the coming months.

But for most industry watchers, the big challenge is how to monitor those operators that are not members of the GPRTU and the GRTTC. These drivers may even go beyond the approved 13% effective this Saturday. This increase, in the long run, affects the inflation rate which could also impact investment returns on funds and even interest rate.

But the governor of the Bank of Ghana, Dr Ernest Addison, recently noted at the MPC conference that, he doesn’t think that the inflation rate could be affected badly by the decision to cut the policy rate to 13.5%.

These taxes might look very outrageous but the utility companies are also hinting at increasing their tariffs and this might become a burden on the citizen.