Ken Ofori-Atta — Minister Finance
Ken Ofori-Atta — Minister Finance

Economic policy, high cost of food

In actuality, monetary policy controls the inflation of food prices, especially in Africa where food makes up nearly all consumption baskets.

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Because they make up a sizable portion of the consumer basket in a country such as Ghana, food prices have an impact on overall inflation dynamics.

The country’s food inflation requires careful monitoring from the central bank.

Food inflation alters the well-being and a sense of contentment with the government, with many individuals earning little wages.

It has become vital to negotiate fair salaries for public sector employees in light of these difficulties.

Food insecurity in Ghana is projected to worsen over the next months due to the intensifying global food crisis.

 If such challenges are not redressed, advancements in other economic areas, including the IT services sector, may be undermined.

By December 2023, millions of Ghanaians would be further driven into poverty.

 Even while government apologists attempt to explain food inflation by attributing the increased cost of food to geopolitical tensions in Russia and Ukraine, there is much to be said about domestic food policy, which restricts our ability to attain food sovereignty.

Food poverty

Technically speaking, bad food governance, which is strongly related to low agricultural spending, is the main reason for food poverty in Ghana today. 
Less than 10 per cent of the total annual budget is spent on agriculture.

Agribusiness development receives not less than 25 per cent of the national budget elsewhere. 

Food inflation will prevail because there is virtually nothing to help the struggling agricultural sector to recover from the COVID-19 pandemic. It harmed agriculture more than many other sectors.

The global food supply chain was seriously disrupted, which led to a decrease in the importation of food and agricultural inputs (seeds, fertilisers, pesticides), and it did not only claim the lives of key players along the value chain, trade restrictions were also loosened.

Cause

The greatest cause of food poverty in Ghana today is weak food governance, closely associated with little spending on agriculture.

 Government expenditure on agriculture is less than 10 per cent of the annual budget.

Elsewhere, not less than 25 per cent of the national budget is devoted to developing agric-related sectors.

With almost nothing to support the ailing agricultural sector slowly recovering from the COVID-19 pandemic shock, food inflation will persist. 

Indeed, the COVID-19 pandemic has done more damage to agriculture than many industries.

It didn’t only claim the lives of vital actors along the value chain, but it severely disrupted the global food supply chain, resulting in reduced importation of food and agricultural inputs (seeds, fertilisers, insecticides).

The trade limitations made our local food system less resilient.

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Sub-Saharan African nations have a long history of food scarcity and have been forced to rely heavily on imports from China, Vietnam and India to make up for domestic food shortages. 

Ghana has regrettably failed to set itself apart from other nations in the area.

Even worse, we have refused to consume the food that we grow. 

Therefore, the effects of the global food crisis on households will only worsen.

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Food inflation and poverty will be the norm, as the country’s traditional breadbasket’s primary food sources continue to dwindle.

Given that the global economy continues to be endangered by the food crisis, policymakers need to focus more on the productive and vulnerable sectors of the economy.

Under these conditions, the Ghanaian economy would weaken and have an impact on livelihoods. 

Value

Food inflation lowers the value of money, which in turn lowers access to food and life expectancy in Ghana.

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Poor households who cannot afford wholesome meals and high-quality food are in danger of contracting more illnesses. 

In the event that nothing is done to control the situation, the elderly will report more cases of fatal illnesses.

Ghana will continue to endure food inflation unless proper mechanisms are put in place to counteract this food inflation, despite having the natural resources to provide food for the entire globe.

Long-term development of food supply networks is required to increase food availability.

A robust local food system must be supported by supply chains.

Africa will continue to be vulnerable and face food poverty as a result of its reliance on imports to make up for domestic food deficiencies.

Despite being politically autonomous, we are not truly self-sufficient in terms of food supply.

Food insecurity will worsen if there is another coup and borders are blocked.

According to the data currently available, Ghana imported $2 billion worth of food from its neighbours in 2019. 

The writer is a Lecturer, 
Economics Department, 
GIMPA Business School.

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