Prof. Samuel Kobina Annim
Ghana’s year-on-year inflation has dropped to 40.1% in August 2023 from the 43.1% recorded in July 2023, according to the latest data from the Ghana Statistical Service (GSS).
The GSS also had a drop in the month-on-month inflation between July 2023 and August 2023, recording -0.2% compared to 3.6% in July.
Food inflation witnessed a decrease to 51.9% in August 2023, from the 55.0% the previous month, while Non-Food inflation also dropped by 2.9% to 30.9% in August 2023.
For the first time in the year, inflation for imported products recorded a rate lower than locally produced items. Whilst inflation for locally produced items was 42.4%, inflation for imported items was 36.2%.
Five divisions recorded inflation rates higher than the national average.
They are Personal Care, Social Protection and Miscellaneous Goods and Services (56.3%); Furnishings, Household Equipment and Routine Household Maintenance (52.6%); Food and Non-Alcoholic Beverages (51.9%); Alcoholic Beverages, Tobacco and Narcotics (46.4%) and Housing, Water, Electricity, Gas and Other Fuels (42.2%).
For Food inflation, 10 out of 15 sub-class registered inflation above the overall food inflation of 51.9%.
The highest were Tea and Related Products (140.2%); Cocoa Drinks (84.4%) and Fruit and Vegetable Juices (66.7%).
At the regional level, Eastern Region recorded the highest inflation of 49.9% in August 2023.
It was followed by the Western Region (49.7%) and Bono Region (47.1%).
The Greater Accra Region recorded the lowest inflation of 31.7%. It was followed by the Ashanti Region with inflation of 32.6%, whilst the Ahafo Region registered an inflation of 33.2%.
The country’s food inflation has increased by almost six folds in a decade, and despite receiving fresh funding from the International Monetary Fund (IMF), it continues to grapple with persistently high food inflation, maintaining its position as one of the highest in Africa and the West African sub-region.
This is due to the fact that major staples in Ghana are out of season, and this is playing a major role in the price build in the market as food items such as tomatoes, onions, cassava, yam, and maize have seen upward adjustments in their prices.
Also, the prolonged war between Russia and Ukraine and the military coup in Burkina Faso have all placed enormous pressure on the country’s food system. The military takeover in Niger also compounded the case as prices of tomatoes, onions and cereals begin to surge in price.
Despite Finance Minister Ken Ofori-Atta initially stating that there would be no need for a supplementary budget, mounting fiscal pressures forced him to cut expenditures by approximately $2 billion.
End-period inflation is now expected to reach 31.3%, significantly higher than the earlier projection of 18.9%.
Additionally, the balance of payment burden is expected to worsen as Gross International Reserves may only cover about 0.8 months of imports.
By Jamila Akweley Okertchiri