Ghana’s struggle with rising prices continues, as the year-on-year inflation rate for January 2024 sees a slight increase to 23.5%.
This places Ghana among the Sub-Saharan African countries with the highest inflation rates, nearly three times the combined rates of neighboring Ivory Coast, Burkina Faso, and Togo.
Within the ECOWAS bloc, both Ghana and Nigeria share inflation rates above 20%, with Nigeria’s nearing 30%. In contrast, neighboring countries like Ivory Coast, Togo, and Burkina Faso boast single-digit inflation rates.
Burkina Faso, currently under military leadership, has an inflation rate of 4.3%, while Togo’s rate is as low as 2%. Ivory Coast, the 2023 AFCON winner, also boasts a single-digit inflation rate, currently at 3.1%.
Ghana’s inflation has not touched single digits for almost four years, with the last instance occurring in March during a lockdown.
Despite receiving close to $2 billion from the IMF, World Bank, and the African Development Bank within the past year and a half under the Extended Credit Facility Programme, Ghana is struggling to maintain healthy international reserves.
The country’s Gross International Reserves have dropped from a historical peak of $11 billion, providing almost six months of import cover, to $5.9 billion as of January 2024, affording less than three months of import cover.
This decline has intensified pressure on the local currency, the cedi, leading to its depreciation against major trading currencies such as the US dollar.
The exchange rate fluctuations impact import duties and other costs, contributing to the rising domestic prices of imported goods. Food inflation stands at 27.1%, persistently rising for four consecutive months and surpassing the overall inflation rate of 23.5%. Ongoing border restrictions in Niger, Mali, and Burkina Faso continue to impact the prices of essential farm produce like onions and tomatoes imported into Ghana.
Crucial ingredients for common household meals, including jollof, banku, and fufu, have recorded inflation rates above 40% in January. Fresh tomatoes, with a significant weight in determining national inflation, have surged by 52.3%. Other essential ingredients like cassava, fish, carrots, and garden eggs have inflation rates twice the national average.
As the December 2024 general election approaches, Ghanaian voters prioritize key issues such as price stability, a resilient currency, and tackling unemployment. Addressing these concerns as the country faces economic headwinds has become paramount for the electorate.