Buying products or paying for services at extravagant prices can be painful and even more disheartening if competitors are all offering same or similar products are about the same price.
I have identified some products in Ghana with astronomical markups. The sellers’ ability to charge such high prices for the product is primarily from two economic reasons; a high demand and short supply of the service or product. Unless you’re very rich, you’ve probably noticed that these products cost an arm and a leg.
For some unknown reason, countless consumers go through thick and thin to find and contact photographers for their events, family shoots and social media pictures, only to hand over half of their monthly earnings to them. Digital photography has already gained prominence in Ghana, but there seem to be short supply of professional photographers who possess excellent business etiquettes. In addition there is an unquenchable demand for crisp images of ourselves. At least 3 out of 5 consumers of a photographer’s service in Ghana are not fully pleased with the service or the final image handed to them.
Photographers cover events like traditional marriage ceremonies (engagement), weddings, naming ceremonies, birthdays and corporate events which usually lasts a maximum six hours for a fee ranging between GHc1,500 to GHc 6,000. It is surprising to note that the emergence of high quality smartphone cameras and growing popularity of possessing a family-owned camera has done virtually nothing to curb the high fees charged by professional photographers in the major cities of Ghana.
2. Real estate
Land and buildings in and around the major cities of Ghana have at least tripled in value over the past decade. Those within and around the capital, Accra and adjacent city Tema have more than tripled in cedi value within the last six years. This has been made possible partly due to demand from wealthy foreigners who continue to enjoy the city of Accra and its pleasures and potent business, but also, and more importantly due to excessive and sometimes unwarranted mark-ups by property owners.
Properties, both residential and commercial, within some ‘prime areas’ of Accra cost as high as and in some cases, more than similar properties in about half of the states of America, most parts of European cities and Africa. Despite the comparatively lower salaries of Ghanaian workers and high cost of living, property prices continue to soar. Decent residential properties in Accra usually range from US$100,000 to figures above a million dollars.
Ghana is blessed with abundance of natural resources – gold, cocoa, sunlight, etc, but if the country is to flourish, it will take something more than these natural resources. Education will play a very big role. The country’s pre-school and basic school levels of education have been flooded with private educational institutions, especially within the major cities. Fees charged by public educational institutions at the basic level are primarily determined by the government, bearing in mind the economic power of the average citizen, thereby making it somewhat affordable. But the perception about the quality of education provided by public schools is very discouraging, relegating it to the economically weak families who have no means to afford the relatively higher quality private school education. The situation has led many high and middle-class families enrolling their wards in private schools from ages as young as 6 months. Private schools have also taken advantage of the situation to charge exorbitant fees especially at the pre-school and basic school levels. Fees at the kindergarten level range from GHc300 per month to as high as GHc4000 per term at basic schools. The training provided in these schools, in my opinion, is not worth half the amount charged in most cases. Formal education in the cities is overrated, and as such private institutions are milking it to the full.
4. Make-up services
I was surprised to learn that facial make-up which would usually last about two hours when carried out by a professional can cost at least GHc300 and as high as a thousand Ghana cedis. Paying as high as GHc1,000 for a two hour service only to wash it off in the next few hours is something that beats the mind of an average earner. But for those paying for the service, they have to make do with it if they want to look good for the occasion. Once again, the strong desires and image-consciousness of our beautiful ladies are the main drivers of the price of make-up services in the country.
5. Financial services
How much are you willing to pay for the services of a bank that keeps your money for you – without paying you interest per se. Running current accounts in most banks in Ghana will attract either a flat fee or percentage of your transactions within the period. Either way, you would be paying about GHc12 in monthly charges and commission for individual accounts. ATM use, internet and telephone banking, and maybe air-conditioned branch offices (lol) are what you enjoy for the charges you pay the banks. Corporate or business accounts would usually attract about GHc30 in monthly charges and in banks where you pay COTs, you could pay as high as GHc1,000. Foreign transfer charges, dollar withdrawals, cheque and cheque book issues, etc are other services that attract high bank charges.
Insurance has had its fair share of public debates, and it’s true the rising cost of insurance is very high. Motor insurance for instance, has risen in the past few months to levels that appear unbearable and highly overpriced if you compare it to the value derived. Insurance is very essential for businesses and individuals and must be appropriately priced.
6. Radio, TV and Newspaper ads
Advertising on radio, TV and in newspapers attract quite some high rates. The pricing is not straightforward like paying for a tin of milk. Radio and TV ads can cost as high as GHc1,000 for a minute ad depending on the station and time of the day and other complexities. Radio and TV still have large listenership (or viewership) but give advertisers no guarantee of listeners acting on the ads. So you can advertise all you can and pay huge sums and reach a large audience but you have no assurance that they would perform the action you expect from them eg. to download a particular app, or buy your product.
In comparison to advertising online using social media or Google adSense, you are assured of paying only if the required action is taken by the targets of your campaign or ad. And remember, these platforms allow you to target your ads to specific group of people, a key marketing requirement which is lacking in the traditional radio and TV advertisement. Despite the growing presence of digital media advertisement, which gives you value for money, radio, TV and newspaper ads continue to charge high rates.
Leisure and entertainment
Having fun shouldn’t be the prerogative of the rich alone. Taking the kids to a lovely place to have fun on weekends has become a practice of the rich folks. You’ll be spending about GHc100 to take two kids to a safe playground in Accra. Movies, musical concerts, night clubs, traveling and sightseeing all come at prices that the average Ghanaian is unable to afford for their entertainment value. These services are priced high and do not reflect the cost of providing them. Even if they do, consumers do not derive the value of the money parted with to enjoy the service.
So next time you patronize a product or service, pause and reflect on the possible mark-up deliberately heaped on it. It is likely that would do little to change the pricing.