In a country where over 80% of citizens rely on public transport to commute to and from work, the impact of the cost of transportation on quality of life can be greater than expected.
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Practical effects of 15% transport fare hikes on your income
Many times when transportation fares go up, users of public transportation complain bitterly.
Consequently, the effect compounds when one factors in the rippling effects of the cost of transportation on everything else, from food to healthcare.
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Pulse.com.gh's financial journalist, Emmanuel Quist, assesses the effects of these tax, utility, fuel and transport fare hikes on the income of the average Ghanaian worker.
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Income Profile of the Ghanaian worker
The average Ghanaian worker earns a minimum of GHC240 a month, the equivalent of $80 a month. This is at the 2016 minimum wage of GHC8
But more practically, a first year employee in Ghana will most likely earn between GHC800 and 1500 depending on the sector.
In playing out the practical effects of the transportation price increase, let's use a bank teller who earns a net income of GHC800 a month.
If that worker lives in Lapaz which is the most populous place in Accra and works at a bank in Accra Central, he or she would have been paying GHC1.80 to work, and GHC2.80 back.
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However, with the current 15% increment in public transport fares, the worker will pay GHC2.10 to work and GHC3.30 back.
In total, the average Ghanaian worker commuting from Lapaz, will pay GHC5.40 everyday to and from work and a monthly total of GHC162 representing %16.2 and instead of GHC138 she paid before. For minimum wage earners, the cost of transportation will taking 67.5% of their salary.
The cost of transportation is further aggravated if you live in the developing areas of Accra. With Accra's population growing at such a rapid pace, getting residence close to the Central parts of Accra is getting very difficult lately. This is why people are moving to the outskirts of Accra, like Dodowa, Oyibi, Tema and Kasoa.
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It used to cost GHC4.0 to get from Tema to Accra. With the 15 percent increment in the cost of transportation, it cost GHC4.60. It will therefore cost GHC9.20 a day to get to and from work. In a month, the average bank teller will spend GHC276 on transport a month. That is 27.6% of his or her salary on transportation and 115% of the minimum wage.
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Ghanaians have been particularly up in arms over the hikes in transportation fares because they feel cheated by the Ghana Transport Coordinating Council, the body in charge of regulating transport fares in the country, in consultation with the Ministry of Transport and the National Petroleum Authority.
The coordinating Council is being accused of acting in an ingenious mannerand in bad fate, increasing the fares even before talks with the necessary stakeholders had been completed.
Again, Civil Society Organisations like the Chamber of Consumer Protection and Public Safety are accusing the coordinating Council of ripping Ghanaians off given that prices of fuel are currently lower than they were the last time the transport fares were last increased in July, 2015.
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The Transport Coordinating Council also mentioned increases in the prices of inputs like lubricants and spare parts as the cost. But the Chamber of Consumer Protection rebutted on grounds that the relative stability of Ghana Cedi has ensured that the prices of spare parts and lubricants have rather stabilized.
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