The Chief Executive Officer of Dalex Finance, Joe Jackson, has cautioned against calls for fuel tax reductions and broad subsidies, warning that such measures could undermine Ghana’s economic stability.
Speaking on a current affairs programme, Mr Jackson argued that rising energy costs pose a significant risk to inflation, particularly through their impact on food prices. He explained that even locally produced food carries substantial logistics costs, which are heavily influenced by fuel prices.
According to him, any increase in fuel and transportation costs would inevitably translate into higher food prices, placing additional pressure on households.
He further noted that both local and imported food items are vulnerable to rising global costs, citing increases in shipping, insurance, and transportation expenses as key contributing factors. As a result, he said, consumers are likely to face upward pressure on food prices regardless of the source.
Mr Jackson also observed that the recent period of relatively low inflation could make the impact of any sudden price increases feel more severe. He explained that while high inflation environments tend to absorb shocks more gradually, low inflation periods can make such changes more pronounced and harder for consumers to manage.
He warned policymakers against reacting hastily to potential economic shocks, urging a measured and disciplined approach.
“The danger is not just the potential crisis, but how we respond to it,” he cautioned, emphasizing that overreaction could inflict more damage than the shock itself.
Mr Jackson stressed the importance of maintaining macroeconomic discipline, warning that poor policy decisions could worsen economic conditions in the medium term.
Rather than implementing blanket subsidies or price controls, he advocated for targeted interventions aimed at protecting vulnerable groups. He suggested that support should be directed toward low-income households, transport-dependent workers, and food-insecure communities.
He acknowledged that implementing such targeted measures would be challenging but insisted that they are necessary to avoid long-term economic distortions.
In addition, he called for urgent steps to address inefficiencies in food logistics, noting that rising food prices are often driven more by transportation, storage, and distribution costs than by production shortfalls.
As part of a coordinated response, he proposed the establishment of a national food logistics task force to streamline the movement of essential commodities and reduce cost pressures within the supply chain.
Mr Jackson also cautioned against interventionist policies such as export bans and rigid price controls, describing them as counterproductive measures that could disrupt market dynamics.
He firmly rejected proposals to suspend fuel taxes, arguing that such blanket interventions would be costly, distortive, and ultimately regressive, offering limited benefit to the most vulnerable while disproportionately aiding higher-income consumers.
He concluded by urging government to remain committed to fiscal discipline and macroeconomic stability, warning that abandoning these principles could result in consequences more severe than the economic shocks policymakers seek to address.
