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Communications sector contributes little to inflation

By Fred Sarpong

Despite its contribution to the Consumer Price Index (CPI) is significantly low, the communications sector is one of the very important sectors to Ghana’s economy.
For some years now the communications sector contribution to Ghana’s inflation has remain the same.
As part of the non-food items in the CPI basket, the communications national weight has consistently be 0.31%, of the total non-food national weight of 55.09%.
In the month January 2013 inflation, the communications sector contributed a year-on-year rate of 0.4% to the non-food sub-sector. But its contribution to January 2013 inflation was 0.0%. This was the same in December, 2012.
According to the Ghana Statistical Service (GSS), the price level of communications services such as telephone charges (with a weight of 90%), EMS charges (5% weight) and standard postage (5% weight) in CPI basket, has remained largely unchanged over some years.
The regional contribution of the communications sector to the national weight is very low. Looking at the December 2012 and January 2013, Western Region contribution has been 0.02%, Central 0.00%, Greater Accra 0.10%, Eastern 0.01%, and Volta 0.03%.
The rest are Ashanti 0.11%, Brong Ahafo 0.02%, Northern Region 0.01% and Upper East and Upper West both had 0.00%.
Magnus Ebo Duncan is the Head of Nation Account at GSS, he told Business Week in Accra last week that communications is one of the special sectors to the contribution of consumer price index. However, call rate especial remains very low and there are stability in some of this communication items such as news papers and stamps the prices have remain stable for a long time.
‘Because of these items have remained stable for a long time that is why we see the low performance of the communications sector contribution to inflation,’ said Duncan.
According to him even though we know call rates are the same throughout, but some use of other communication and services prices differ in some regions of Ghana. ‘Example is space-to-space, which is mainly common in rural areas,’ he added.
He stated that the CPI basket will be review in middle of March this year and communications contribution to the basket may change. ‘This is because it will be using almost the same items, except that the use of internet will be added to the new communications sector,’ Duncan said.
The Ghana’s telecom for some times now has seen competition among the industry players, especially on price level. The operators are MTN, Vodafone, Tigo, Airtel, Glo and Expresso. But their data charges are competitive.
During the 2012 third quarter gross domestic product (GDP) announced by GSS, the main contributors to the services sector were Hotel and Restaurants 31.8%, Financial andInsurance activities 22.6%, and Business, Real Estate and Other business activities 15.3%.  However, Transport and Storage, and, Information and Communication subsectors contributed negatively to the growth of the services sector.


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