Joe Jackson warns against fuel tax cuts, urges targeted support as food inflation risks rise

The Chief Executive Officer of Dalex Finance, Joe Jackson, has rejected calls for fuel tax cuts and broad subsidies, cautioning that such measures could worsen Ghana’s economic outlook if not carefully handled.

Speaking to the media, Mr Jackson warned that rising energy costs could trigger wider inflationary pressures, particularly in food prices, due to the heavy role logistics plays in pricing.

“Energy prices are just one part of the challenge. The bigger issue is food price inflation, because even locally grown food has up to 40% of its cost embedded in logistics,” he said.

He stressed that any increase in fuel and transport costs would inevitably feed into food prices.

“So if the cost of fuel and logistics goes up, we’re going to be hit eventually. Where it will hit hardest will be food,” he stated.

Mr Jackson noted that both local and imported food would be affected, pointing to rising global shipping and insurance costs.

“Even if food is imported, the cost per container has gone up. Insurance and transportation costs have increased. So any way you look at it, we are between a rock and a hard place where food prices are concerned,” he explained.

He further warned that the recent period of relatively low inflation could make any price shocks feel more severe.

“When inflation is high, shocks are absorbed and expected. But when inflation is low, the impact feels much harder,” he said.

Cautioning against panic-driven responses, Mr Jackson urged policymakers to act with precision.

“We should treat this as a potential shock and approach it with a scalpel, not a sledgehammer. If we overreact, we risk making the situation worse,” he said.

He warned that poor policy choices could inflict more damage than the shock itself.

“If we lose discipline and fail to keep our macroeconomic numbers in check, the pain from overreacting could be worse than the shock,” he added.

Mr Jackson strongly opposed blanket subsidies and administrative price controls, describing them as costly, distortive and regressive.

“The focus should be on protecting households, not suppressing prices. Broad subsidies will be expensive and will benefit the wrong groups,” he said.

Instead, he called for targeted interventions aimed at vulnerable populations, including low-income households, transport-dependent workers, and food-insecure communities.

“Government should expand support for the most exposed groups—the urban poor, low-income earners, and districts facing food insecurity,” he suggested.

He also highlighted the need to address inefficiencies in food logistics, noting that rising food prices are often driven by transport, storage and distribution costs rather than production shortages.

“As food inflation rises, it is not because farms are producing less, but because moving and storing food has become more expensive,” he explained.

To address this, Mr Jackson proposed the formation of a coordinated national task force focused on food logistics.

“This should bring together trade, agriculture, transport, local government and security agencies to focus on the movement of staple foods,” he said.

He cautioned against interventionist policies such as export bans and price controls, warning that such measures could undermine market stability.

“We should avoid anti-market responses that may appear popular but ultimately create distortions,” he said.

Reiterating his opposition to suspending fuel taxes, Mr Jackson argued that such policies would disproportionately benefit wealthier individuals.

“What are we trying to do—subsidise fuel so those with large engine cars can pay less? That would be regressive, and the poor would benefit the least,” he stated.

He concluded by urging government to maintain fiscal discipline to safeguard long-term economic stability.

“Let’s keep our macroeconomic stability intact and maintain expenditure discipline. Otherwise, the cost of our response could be higher than the shock itself,” he said.

Mr Jackson also warned that while there are signs of a potential crisis, the situation has not yet fully materialised, urging authorities to remain measured in their response.

“The biggest danger is overreacting to a crisis that is not yet here,” he cautioned.