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Hike in Commodity Prices: Consumers, Traders Concerned

…as cost of living increases, standard of living plummets

July 25, 2016 By Regina Pratt

Traders and consumers in the capital Freetown have raised grave concern over the continuous hike in prices of basic commodities – both imported and locally produced.

Madam Dora Kamara, a house wife in Freetown, told Concord Times that local foodstuff from the provinces are now very expensive to afford and that the situation is seriously affecting households.

 “Local produce from the provinces are now very expensive and we do not know the cause. We are calling on the government to bring back food inspectors so that they can monitor the prices of the various commodities in the market,” she said.

Prices of food commodities in particular have increased over the past months, blamed largely on a run-away inflation the government has failed to control, despite talks to the contrary.

For instance, the price of palm oil is now Le2,700 per pint;  pepper cost Le1,000 to 2,000  per cup, the staple, rice trade at Le1,300 or Le1,400 per cup, while a pint of vegetable oil now sells at Le3,000.

A recent Consumer Price Index (CPI) survey conducted by Statistics Sierra Leone reveals an alarming increase in prices of commodities in the country. It states that the National Monthly Consumer Price Index increased from 266.01 percent in April, 2016, to 268.44 percent in May, 2016, resulting in a 0.90 percent increase in inflation rate.

The survey cites the exponential increase in the prices of basic commodities as evidence of the high inflation rate, adding that the situation is predicated on the continuous depreciation of the Leones as against foreign currencies, especially the US dollar.

“There was a general increase in the price level in all the four regions which affected most of the components in the Consumer Price Index basket,” the survey reveals.

The National CPI measures the change in prices on average from month-to-month – of goods and services bought by most households in Freetown, Bo, Kenema and Makeni –  including all expenditure groups, families and single persons.

According to Statistics Sierra Leone, prices were collected for 251 items on the prevailing retail market prices from six markets in the greater Freetown area, three markets in Bo and Kenema, and two in Makeni for weekly prices, and other outlets for monthly items, which ose prices are less likely to fluctuate rapidly.

Meanwhile, traders who spoke to Concord Times expressed similar sentiment and blamed the hike on the foreign exchange rate, thus calling on the government to help remedy the situation.

Many fear that their businesses might collapse if the government failed to take timely appropriate action.

As a measure to handle the depreciation of the Leone to the United States Dollars, the Bank of Sierra Leone had urged all businesses to do their transactions in the local currency instead of the United States Dollar.

President Koroma also made an appeal via text message, calling on all citizens to conduct transactions in Leones instead of the US dollars.

However, local economists are of the opinion that the high inflation rate and precarious state of the Leone was more as a result of the country’s inability to export goods and services and overreliance on importing almost every consumable, than merely trading in US dollars locally. They blame the current state of affairs partly on bad economic policies by a government that was spending profligately during the iron ore boom, and bloating the size of the public service, among other reasons.

Accordingly, the desperate measures introduced by the Central Bank and plea from the President have so far proved to be fruitless endeavours as prices of commodities continue to skyrocket unabatedly.

Mrs. Rugiatu Kabba, a dealer in used shoes, says that last year the cost of a bag of secondhand shoes was Le250,000, but the price has more than doubled to Le550,000.

She blames the inflation and the attendant exchange rate of the Leone and US dollar. The dollar currently trades at Le695,000 for a hundred dollar.

The exchange rate has also adversely affected meat sellers in Freetown. Amadu Barrie, a meat seller, told Concord Times that they use foreign currency to buy cows from neighbouring Guinea.

According to market survey conducted by Concord Times, a pound of meat not cost Le18, 000, up by 50 percent.

A senior official at the Ministry of Trade and Industry, who preferred anonymity, admits that high inflation rate is the reason for the increase in prices of basic commodities. He insists though that the ministry was doing all it could to work with the Bank of Sierra Leone and the Ministry of Finance and Economic Development to try and ameliorate the dire economic situation.

She says the minister and officials in the ministry are working to review the Trade Act and amend certain sections, including giving more powers to trade inspectors and monitors.

But it remains to be seen whether that by itself will stem the follow of inflation in the country, which has invariably worsened the living standard, due to the high cost of living.