Chief Executive Officer of Dalex Finance, Joe Jackson, has pushed back against calls for fuel tax reductions and subsidies, cautioning that such measures could worsen Ghana’s economic outlook.
Speaking on PM Express on Joy News, he warned that rising energy costs could have far-reaching effects, particularly on food prices, due to the heavy role logistics play in the cost of food.
According to him, logistics account for as much as 40% of the cost of locally produced food, meaning any increase in fuel and transportation costs would inevitably drive up food prices. He noted that both locally produced and imported food would be affected, as global shipping, insurance, and container costs continue to rise.
Mr Jackson also highlighted that recent low inflation levels could make any price shocks feel more severe. He explained that while high inflation tends to absorb shocks, periods of low inflation often make sudden increases more noticeable and impactful on households.
He cautioned against panic-driven policy responses, warning that overreacting to a potential crisis could do more harm than the crisis itself. Instead, he urged policymakers to adopt measured, precise interventions.
Emphasising fiscal discipline, Mr Jackson argued that poor policy choices—particularly broad subsidies—could distort the economy, prove costly, and disproportionately benefit wealthier individuals rather than vulnerable groups.
He recommended that government prioritise targeted support for those most at risk, including low-income households, urban poor communities, transport-dependent workers, and food-insecure districts, rather than attempting to control prices across the board.
Addressing implementation challenges, he acknowledged that targeting support would be difficult but necessary to avoid long-term economic damage.
Mr Jackson also called for urgent steps to stabilise food logistics, noting that rising food prices are often driven more by transport, storage, and distribution costs than by farm output.
As part of a coordinated response, he proposed the establishment of a national food logistics task force involving key sectors such as trade, transport, local government, and security, to focus on improving the movement of essential goods.
He further cautioned against interventionist policies such as export bans and price controls, describing them as counterproductive.
Rejecting calls to suspend fuel taxes, Mr Jackson maintained that blanket interventions would be regressive and inefficient, benefiting higher-income individuals more than the poor.
He concluded by urging government to maintain macroeconomic stability and spending discipline, stressing that losing control of these fundamentals could result in economic pain greater than any external shock.
