Economist Advocates Stronger Price Regulation to Curb Market Inefficiencies
By: Solomon Nartey Tetteh
Senior Finance and Economics Lecturer at the University of Ghana Business School (UGBS), Dr. Jabir Mohammed, has attributed persistent high prices in Ghana to profit-driven seller behaviour and weak regulatory systems.
Speaking on Business Breakfast on Zed 101.9FM, Dr. Mohammed noted that even when government interventions reduce production costs, many traders are reluctant to significantly lower their prices.
“In this country, when prices go up and there are government interventions that lower the cost of production, individuals still want to maintain higher profits. They don’t want to bring prices down,” he said.
According to him, in instances where prices are reduced, the adjustments are often marginal and have little meaningful impact on consumers. He described this as a profit-motive attitude that contributes to inefficiencies within the market system.
Dr. Mohammed explained that the absence of an integrated national data system further worsens the situation. He pointed out that government lacks a centralized mechanism to adequately track essential goods and services, including details about imports, distribution, and pricing structures.
“Government does not have control over prices. People price their goods and services based on their own discretion,” he stated.
The economist stressed that while Ghana operates a market-driven economy, the lack of strong monitoring frameworks allows some businesses to price goods far above their marginal cost, enabling them to earn what he described as excessive profits.
He proposed the establishment or strengthening of a consumer protection body with the mandate to regulate food prices and ensure fairness in the market. Such an institution, he stressed, would introduce checks and balances to prevent arbitrary pricing.
“If you price too much above your marginal cost, it means you are earning more profit than you should. With proper checks in place, we can have profits that are reasonable and beneficial for everyone,” he explained.
Dr. Mohammed further drew comparisons with advanced economies, noting that many developed countries operate centralized data systems that enhance transparency and market oversight. In such systems, he said, businesses cannot price goods arbitrarily because regulations and competitive forces work together to maintain balance.
“In most advanced countries, government has centralized data and greater control over market activities. People cannot just price anyhow. They must fall within specific categories, and competition forces you out if you attempt to overprice,” he added. Dr. Mohammed highlighted that strengthening data integration and empowering regulatory institutions would help promote price fairness, protect consumers, and ensure a more efficient market system in Ghana.
