Lower prices, “koromak” is on the wrong track! (By Dr Samba Faye)

Lower prices, “koromak” is on the wrong track! (By Dr Samba Faye)
Lower prices, “koromak” is on the wrong track! (By Dr Samba Faye)

Let us first clarify that this drop is really not a drop. In fact, reducing 100f on the 20L can (oil), that’s a reduction of 5f per liter…

Beyond this “epsilonic” decline, the government’s approach to reducing the cost of living poses a semantic and operational problem.
At the semantic level, economic theory does not admit an administration of output prices (final consumption products) without acting on factor costs.
From an operational point of view, setting the price of the baguette at 160f will pose a serious coinage problem.

→ ALSO READ: Price reduction: a vicious circle (By Thierno Bocoum)

How to reduce prices? To answer this question we must first analyze their structure. Generally speaking, the Senegalese economy is affected by the length of distribution circuits.
For a viable solution, let us remember that the state does not decree a drop in prices but creates the conditions through an incentive policy. To do this, the government can act on three levers.
Firstly, we must reduce the state’s lifestyle (electoral promise apparently postponed indefinitely). Remember that Sonko and Diomaye have respectively 9 billion and 11 billion in political funds, HCCT 8.5 billion, CESE 7.5 billion… This makes it possible to reallocate tens of billions in sectors with a high multiplier coefficient. Then, the government will have to act on the cost of factors such as electricity, flour, fuel, connection for E-commerce… Finally, in the medium term, we must reduce distribution circuits to move towards hard- discount…

Breaking the thermometer does not lower the fever!

→ ALSO READ: Sugar, rice, oil and bread: The date for the entry into force of the new prices announced

Dr Samba Faye
Member of the executive unit of the Republic of Values

→ ALSO READ: When will the price reduction meetings take place? (By Souleymane Ba)



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