Ghana’s economy has taken an unexpected turn, with inflation rates rising to 21.5% in September 2024, after months of decline ¹. Economist Peter Terkper attributes this upward shift to price hikes in essential goods and services, such as maize and rent. Maize, a staple food in Ghana, has seen significant price increases, contributing to the inflation rise. Rising costs of rent and transportation are also driving inflation, while currency depreciation and high import costs may lead to shortages and price increases for goods not available locally.
The recent inflation surge has raised concerns among economists, who emphasize the need for government intervention to analyze and address the root causes of inflation. Terkper advocates for targeted policies to reduce costs on high-impact goods and prevent further increases in the cost of living. He suggests that reduced imports could boost local production, but careful consideration must be given to mitigating the risks of currency depreciation and high import costs.
To combat inflation, the government must take proactive measures. This includes implementing policy reforms to reduce costs on essential goods and services, managing currency depreciation to minimize its impact on import costs, and supporting local production to reduce reliance on imports. By understanding the driving factors behind inflation and taking targeted action, Ghana can stabilize its economy and ensure a more sustainable future for its citizens.
In the past, the government has implemented measures to address economic challenges, such as expenditure cuts, reduction of fuel coupon allocations, and imposition of moratoriums on foreign travels and establishment of new public sector institutions. However, more needs to be done to address the current inflation concerns. The government must work closely with economists, stakeholders, and citizens to develop effective solutions and ensure the country’s economic stability.
Ruth Abla ADJORLOLO
