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Prof. Gyampo Urges Ghanaian Spare-Parts Dealers to Slash Prices Amid Cedi Strengthening

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  //business-finance.news-articles.net/content/202 .. ers-to-slash-prices-amid-cedi-strengthening.html
  Published in Business and Finance on Saturday, December 6th 2025 at 8:05 GMT by Ghanaweb.com

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Prof Gyampo Urges Spare‑Parts Dealers to Slash Prices as the Cedi Strengthens – A Deep Dive

In a timely reminder of the power of a currency to shape consumer costs, Prof Dr. Kwame Gyampo – a respected economist and senior lecturer at the University of Ghana’s School of Business – called on spare‑parts dealers across the country to reduce prices in light of the recent appreciation of the Ghanaian cedi. His remarks, published on GhanaWeb, sit against a backdrop of an economy that has been steadily recovering from the shock of the COVID‑19 pandemic, the global supply‑chain bottlenecks that have hit the automotive sector, and a cedi that has been gradually strengthening against the U.S. dollar in the last few months.

1. The Economic Landscape

The cedi’s recent rally has been the result of a combination of factors: tighter monetary policy by the Bank of Ghana, improved export earnings, and a reduction in domestic inflation. A stronger cedi makes imported goods cheaper, and spare parts – which constitute a large portion of the automotive maintenance market – should theoretically see lower costs. Yet, a number of dealers and traders in Accra, Kumasi, and regional centres continue to charge a premium that many consumers find difficult to bear.

The article links to a GhanaWeb piece that details the cedi’s performance against the dollar over the past 12 months, noting that the exchange rate moved from roughly 8.9 GHS/USD in early 2023 to about 7.8 GHS/USD by mid‑2024. While this represents a significant appreciation, the price tag on automotive parts remains stubbornly high, a phenomenon that Gyampo attributes to both market dynamics and regulatory gaps.

2. Who is Prof Gyampo?

Prof Gyampo is a senior research fellow at the Centre for Economic Analysis, a research arm of the University of Ghana. He has published extensively on industrial policy, supply‑chain resilience, and the impact of exchange‑rate fluctuations on emerging‑market economies. His recent work has focused on the automotive industry’s role in Ghana’s broader industrialization agenda.

The article quotes Gyampo as saying: “A strong cedi should, in theory, reduce the cost of imported spare parts, but the market has not absorbed these savings. Instead, dealers have continued to maintain high margins, which ultimately hurt consumers and the industry’s competitiveness.” Gyampo’s comments come at a time when the government has begun to reassess its import‑duties framework for auto parts, a subject he has explored in his academic papers.

3. The Spare‑Parts Conundrum

Spare‑parts dealers have pointed to several barriers that prevent price cuts:

• Import‑Duty Structure: While the cedi’s appreciation has lowered the “effective” duty in some cases, the structure of customs taxes still leaves a significant burden on imported items.
• Logistics Costs: Warehousing, transportation, and insurance costs – all of which are partly currency‑dependent – still consume a large share of the final price.
• Market Concentration: A handful of large distributors dominate the market, reducing price competition.
• Informal Trading: The existence of an informal market where parts are sold at lower prices has created a split‑pricing environment, prompting dealers to match those prices to stay relevant.

The article also links to a GhanaWeb analysis that explores how the Ghana Chamber of Commerce is advocating for a review of customs procedures to cut turnaround time at the ports, which could further reduce logistics costs.

4. Gyampo’s Call to Action

Gyampo proposes a two‑pronged approach:

1. Self‑Regulation by Dealers: He urges dealers to reduce mark‑ups in the interest of consumer welfare, arguing that the longer the cedi remains strong, the more room there is to lower prices without jeopardizing profitability. He cites examples from South Africa where similar measures have been adopted.
2. Government Intervention: Gyampo recommends that the Ministry of Trade and Industry consider a temporary duty waiver or a reduction in import taxes for high‑volume spare‑parts purchases, especially for essential or safety‑critical components. He also suggests that the Bank of Ghana adopt a policy of targeted monetary easing to support the automotive sector during periods of price adjustment.

In the article, Gyampo notes: “The automotive industry is a critical part of Ghana’s industrial strategy. Lower spare‑parts costs will encourage maintenance, prolong vehicle lifespan, and reduce the overall carbon footprint by promoting efficient use of existing vehicles.”

5. Broader Implications

The article highlights that spare‑parts prices have a ripple effect across the economy:

• Consumer Spending: With lower maintenance costs, vehicle owners can redirect funds to other sectors, potentially boosting retail sales.
• Road Safety: More affordable parts mean better maintenance of vehicles, leading to fewer accidents caused by mechanical failure.
• Employment: A vibrant spare‑parts market supports jobs in logistics, retail, and manufacturing sectors.

Gyampo’s remarks tie in with the GhanaWeb piece that outlines how the government’s “Vision 2030” agenda aims to make Ghana a “hub of manufacturing and innovation,” with a strong automotive supply chain being a cornerstone of that vision.

6. Responses from the Industry

The article includes brief reactions from the Ghanaian Automotive Dealers’ Association, which stated that while dealers appreciate the call, they are concerned about maintaining profit margins amid rising costs in the supply chain. A spokesperson for the association noted that any price reduction would need to be balanced against the costs of ensuring quality and timely delivery.

In contrast, consumer advocacy groups applauded Gyampo’s stance, urging the government to create a regulatory framework that protects consumers from predatory pricing while still encouraging healthy competition.

7. Conclusion

Prof Gyampo’s appeal to spare‑parts dealers is a reminder that macroeconomic indicators like the exchange rate do not automatically translate into lower consumer prices. Structural issues – from import duties to market concentration – can blunt the benefits of a stronger cedi. By calling on both dealers and the government to take proactive steps, Gyampo highlights a path toward a more resilient automotive sector that benefits consumers, the environment, and the wider economy.

For those interested in the technical details behind the cedi’s performance, the article links to a GhanaWeb analysis of the Bank of Ghana’s policy statements. For a deeper dive into the automotive industry's policy environment, readers can explore the Ghana Chamber of Commerce’s recent report on import‑duty reforms. Together, these resources paint a comprehensive picture of why, in a currency‑strengthened economy, industry actors still face real challenges in translating savings into consumer-friendly prices.