News Guide Africa

Tag: Ghana Statistical Service (GSS

  • Ghana’s economy navigates inflation easing and structural debt

    Ghana’s economy navigates inflation easing and structural debt

    By Adnan Adams Mohammed

     

    Ghana’s macroeconomic landscape reflects a delicate transition from emergency fiscal stabilization to long-term structural recalibration.

    Following a turbulent period marked by comprehensive sovereign debt restructurings, rapid currency depreciation, and double-digit price increases, key performance indicators suggest an economy finding its footing. However, underlying structural vulnerabilities, ranging from elevated borrowing costs to persistent energy sector liabilities, continue to temper broader growth expectations.

    Data from the Bank of Ghana and the Ghana Statistical Service highlights a notable deceleration in headline inflation from historic highs. This disinflationary trend has allowed monetary authorities to transition away from aggressive monetary tightening, stabilizing the benchmark policy rate at 14.0%. Backed by strong international prices for gold, resilient cocoa receipts, and steady donor inflows under ongoing multilateral support programs, the Cedi has experienced reduced volatility compared to previous adjustment cycles, bolstering foreign exchange reserves and consumer sentiment.

     

    Macroeconomic Indicator Previous Peak / Level Current Estimate Policy Implications

    Real GDP Growth 0.5% (2020) ~4.8% – 5.0% Driven primarily by non-oil services and industrial extraction.

    Monetary Policy Rate 30.0% (July 2023) 14.0% Easing liquidity constraints while maintaining an anti-inflationary bias.

    Public Debt-to-GDP ~61.0% ~45.5% Reflects restructurings, though debt-service ratios remain elevated.

    Current Account Deficit Surplus (~4.4% of GDP) Supported by trade surpluses in the extractive export sectors.

     

    Expert Perspectives on the Recovery

    The ongoing trajectory of the domestic economy remains a subject of active debate among monetary authorities, international development partners, and private enterprise operators:

    “The current policy stance is intended to steer inflation toward the central bank’s medium-term target while allowing policymakers more time to assess incoming data and its implications for the domestic economy”, Dr. Johnson Asiama, Governor of the Bank of Ghana.

     

    “We are moving into a phase of measured recovery, where fiscal stability and disciplined debt management take priority over rapid, unchecked expansion”, World Bank Regional Lead, Africa Economic Update.

     

    “While easing inflation helps bring down operational input costs, high interest rates and cautious consumer spending mean small businesses still face tight liquidity”, Kwame Addo, Private Sector Analyst & Trade Consultant

     

    “Ensuring that the macroeconomic gains filter down to the real economy requires sustained investment in domestic value-addition, particularly in agribusiness and light manufacturing”, Abena Mensah, Senior Fellow at the Center for Economic Policy

     

    Key Growth Drivers vs. Downside Risks

    ● Primary Growth Drivers: The non-oil services sector led by telecommunications, financial services, and digital trade continues to serve as the chief engine of domestic output. This is complemented by strong extractive yields from high gold production and an improved balance-of-payments position that provides crucial import cover.

    ● Fiscal and Structural Challenges: Although the primary budget deficit has narrowed under strict expenditure controls, high legacy debt-service obligations, tight domestic credit conditions, and elevated youth unemployment continue to restrict private sector capital investment.

    ● Energy Sector Liabilities: Accumulating arrears within the domestic power supply chain remain a notable implicit fiscal liability, requiring continued sector reform to prevent fiscal slip-ups.

    ● External Volatility: External commodity price fluctuations, particularly shifting global oil and cocoa prices, continue to present vulnerability to state revenue projections and foreign exchange supply.

    While macroeconomic stabilization initiatives have successfully curbed runaway inflation and reduced currency volatility, translating these top-line figures into widespread employment creation and improved living standards remains the chief hurdle for economic managers over the medium term.

     

  • Two economies, one country

    Two economies, one country

    Ghana’s growth rate depends on who you ask. That should worry the people who ask.

    BY THE KASOA ECONOMIST | ACCRA | AUGUST 3RD 2026

    Ask the African Development Bank how fast Ghana’s economy grew last year and the answer is 5.8%, with inflation down to 14.6% and the central bank’s policy rate cut by 350 basis points to 18%. Ask the World Bank and a rather different country appears with headline inflation of just 3.3% in February, a milder 5.1% growth forecast for 2026, and a story built less around monetary tightening than around a new offshore oilfield coming on stream. Both institutions are looking at the same economy. Neither is lying. That is the more unsettling possibility.

    Statistical disagreement between multilateral lenders is not new, and a gap of a percentage point or two in a growth forecast is the ordinary noise of economic modelling. What is harder to wave away is the inflation figure, where the AfDB’s 14.6% and the World Bank’s 3.3% are not measuring slightly different things. They appear to be measuring different months, different baskets, or different vintages of an economy that has been moving unusually fast. Ghana’s disinflation over the past two years has indeed been dramatic, but a nine-fold difference between two reputable sources is not a rounding error. It is a sign that Ghana’s statistical infrastructure is being asked to keep pace with a recovery that outran it.

    This matters more than it might seem. Investors, credit-rating agencies and Ghana’s own finance ministry all draw on these numbers to set expectations, price bonds and calibrate budgets. A pension fund manager in London deciding whether to buy Ghanaian eurobonds does not average the AfDB and World Bank figures. She picks whichever number suits her risk appetite, and worries about the other. A finance minister presenting a mid-year budget review, as Dr Cassiel Ato Forson did on July 23rd, must choose a single inflation assumption to build his numbers around, knowing that whichever he picks will be cited by critics as either too rosy or too gloomy. Divergent data does not average out into a sensible middle. It hands ammunition to whoever wants to make an argument.

    Some of the gap is methodological and defensible. The AfDB’s 14.6% plausibly reflects a year-on-year headline rate drawn from an earlier reading, capturing the tail end of Ghana’s post-crisis disinflation. The World Bank’s 3.3% looks more like a recent monthly print, taken after food and fuel prices had continued falling through the first quarter of 2026. Both can be true without contradicting each other, in the way that “it rained heavily this year” and “it is not raining right now” can both be accurate descriptions of the same country. The trouble is that neither institution’s report, in its public-facing summary at least, makes this clear enough for a non-specialist reader and precious few of the officials, journalists and traders who repeat these numbers are specialists in vintage-adjustment.

    There is a second, less charitable explanation, and it deserves airing rather than suppression, in the spirit of taking one’s own side’s argument seriously enough to test it. Multilateral development banks are not neutral computers. They are institutions with mandates, and mandates shape emphasis. The World Bank’s mission leans toward showcasing the success of the reforms it has helped finance the energy-sector clean-up, the cocoa restructuring, the new PECAN oilfield are all, in some sense, its own investment thesis vindicated. A lower inflation figure and a growth story anchored in new oil production reads as an institution pleased with its portfolio. None of this need be conscious cherry-picking. Institutions, like people, notice the data that confirms the story they are already telling.

    Ghana’s own statistical service is, in principle, the arbiter that should settle this. The Ghana Statistical Service publishes its own monthly consumer price index, and any credible number should ultimately be reconciled against it rather than triangulated from two foreign lenders with different reporting cycles. That the AfDB and World Bank figures diverge this sharply, rather than converging on the GSS’s own print, suggests both institutions are working from data with meaningfully different cut-off dates. This is an unglamorous explanation, but the likeliest one, and a reminder that “as of when” is doing more analytical work in African macroeconomic reporting than most headlines admit.

    The deeper lesson is not really about Ghana. Statistical capacity across much of sub-Saharan Africa remains thin, price surveys are conducted less frequently than in rich countries, and GDP rebasing exercises can move growth estimates by several percentage points overnight without the underlying economy having changed at all. When the underlying data infrastructure is this fragile, every multilateral report becomes less a measurement than an estimate wearing measurement’s clothing, and readers who treat these numbers with false precision are building conclusions on sand.

    None of this should curdle into blanket cynicism about African economic data, which is a lazier failure mode than the naive credulity it replaces. Ghana’s broad direction of travel such as falling inflation, a shrinking fiscal deficit, an oil sector adding new production, a currency under strain but not collapse, is consistent across every source, AfDB and World Bank alike, even where the decimal points disagree. The disagreement is real, but it is a disagreement about degree, not about direction. That is a meaningfully different, and less alarming, kind of uncertainty than it first appears.

    What Ghana needs, and what its statistical service, its finance ministry and its development partners could usefully coordinate on, is a single published reconciliation each quarter one table, one set of dated figures, footnoted by source and vintage, that journalists and analysts can cite without having to guess which institution’s number to trust this month. It is a modest, unglamorous fix for an unglamorous problem. But a country trying to convince bond markets it has left crisis management behind cannot afford to let its own success story be told in two contradictory voices at once.

     

  • Mining cost surge pushes factory inflation to 5.8% …as industry demand shift to local cement raw materials

    Mining cost surge pushes factory inflation to 5.8% …as industry demand shift to local cement raw materials

    By Adnan Adams Mohammed 

    Ghana’s industrial sector is facing an intense dual squeeze of escalating production expenses and a volatile global supply chain.

    New data has revealed a steep spike in the country’s Producer Price Inflation (PPI). Simultaneously, industrial players and government officials are sounding alarms over the soaring costs of building infrastructure, demanding an aggressive pivot toward domestic raw materials to salvage the manufacturing and construction sectors.

    According to the latest figures released by the Ghana Statistical Service (GSS), annual producer inflation climbed sharply to 5.8 percent in May 2026, up from 2.7% recorded in April. This metric indicates that, on average, domestic producers received 5.8% more for their goods and services compared to the same period last year.

    The primary catalyst behind this spike was the mining and quarrying sector, which registered an inflation rate of 11.0% in May. The rebound was also heavily driven by recoveries in transport and storage, which vaulted from a negative 6.6% in April to a positive 7.7% in May, alongside manufacturing, which recovered to 0.7% from negative 0.7%.

    While annual indicators suggest renewed cost pressures at the factory gate, the GSS reported a minor silver lining: producer prices actually declined by 1.4% on a month-on-month basis between April and May 2026. Because PPI acts as a leading indicator for retail markets, experts warn that these overarching annual production increases are bound to trickle down to everyday consumers through higher retail prices.

    The Clinker Crisis: The True Culprit in Housing Costs

    Nowhere are these upstream production cost pressures more visible than in the domestic building sector. Speaking at the INTERCEM Africa 2026 conference in Accra, industry leaders revealed that Ghana’s reliance on imported clinker the foundational component used to bind cement is heavily draining local industries due to global shocks, port congestion, and volatile fuel prices.

    Frederic Albrecht, Chairman of the Chamber of Cement Manufacturers, Ghana (COCMAG) and CEO of CBI Ghana, explained the structural challenges pinning down local operations:

    “Clinker production is not possible in Ghana because of unsuitable limestone deposits. Yet clinker remains a major input in cement production, and importing it is increasingly expensive due to rising fuel costs, port congestion, and global supply disruptions.”

    Albrecht emphasized that clinker production is uniquely exposed to global energy markets, requiring processing temperatures of up to 1,500 degrees Celsius. To protect the economy from exchange rate pressures and price volatility, he stressed that alternative local formulas are no longer optional:

    “We must develop a different type of cement that allows Ghana to become more self-sufficient. By reducing clinker ratios and utilising local raw materials, we can lower production costs, improve competitiveness, and reduce pressure on foreign exchange.”

    State Demands Innovation: Shift to Clay and Limestone Alternatives

    The government has echoed this sentiment, warning that the state’s massive industrialization and housing projects will continue to demand massive quantities of cement, making imported supply lines unsustainable.

    The Minister for Trade, Agribusiness and Industry, Elizabeth Ofosu-Adjare, issued a direct charge to manufacturers to prioritize local inputs like clay and specialized limestone variations to make development cost-effective:

    “Our cement industry must become more affordable, accessible, and sustainable. We must reduce clinker imports and invest in local raw material production. There are significant local resources that can be harnessed.”

    The Minister pointed to early progress in Limestone Calcined Clay Cement (LC3) by domestic leaders as proof that the shift is viable.

    “The example set by CBI and Ghacem shows that this transformation is achievable. We expect more companies to replicate these efforts to reduce clinker usage in our building projects. Whether we like it or not, Ghana’s development will require more cement. However, we must produce it in an eco-friendly manner by reducing clinker imports and promoting import substitution.”

    A Three-Year Horizon for True Transformation

    Despite the consensus on utilizing local raw materials to ease macro-inflationary burdens, reversing decades of import dependency will require significant structural adjustments. Transitioning to low-clinker options requires heavy capitalization and long-term infrastructure upgrades.

    “Establishing alternative production systems takes about three years,” Albrecht noted, calling for proactive planning. “It requires foresight, investment, and strong collaboration between industry players and government.”

    Adding to this sentiment, Bishop Dr. George Dawson-Ahmoah, CEO of COCMAG, highlighted the immediate benefit of international knowledge-sharing platforms to speed up this transition:

    “This conference provides a valuable platform for innovation and collaboration. It is helping Ghana’s cement producers adopt more sustainable practices, including the use of clay and other local materials to reduce clinker dependency.”

    With macro-level factory gate inflation climbing back up to 5.8%, policymakers and corporate leaders recognize that shielding households from soaring retail costs requires reshaping the basic supply lines of the Ghanaian industrial sector.

     

  • Standard Bank Research projects resilient 6.1% growth for Ghana amid geopolitical headwinds

    Standard Bank Research projects resilient 6.1% growth for Ghana amid geopolitical headwinds

    By Adnan Adams Mohammed

     

    Ghana’s macro-economic recovery is poised to maintain solid momentum, with the economy projected to expand between 5.9% and 6.1% in 2026, according to the latest market insights from Standard Bank Research.

    The optimistic growth forecast comes at a crucial time when emerging markets are navigating complex global pressures, particularly heightened geopolitical tensions and supply chain disruptions rooted in the Middle East conflict. Despite these severe external challenges, the research underlines Ghana’s strong foundational resilience, buoyed by robust performances in key domestic sectors.

    According to investment analysts, the West African gold, cocoa, and oil-producing nation is successfully charting its way out of its most severe economic crisis in decades, showing greater price stability and structural fortitude.

    “Ghana’s economic fundamentals are proving remarkably resilient against external shocks,” noted a lead macro-strategist at Standard Bank. “While escalating tensions in the Middle East pose undeniable risks to global energy costs and trade routes, Ghana’s diversified resource base particularly a booming gold sector and strategic fiscal consolidation provides an essential buffer that will keep growth firmly on track.”

     

    Driving Force: Services and Industry

    The Standard Bank projection aligns with recent data from the Ghana Statistical Service (GSS), which reported that the nation’s economy expanded by an impressive 6.4% in the first quarter of 2026, surpassing previous cycles. The expansion continues to be heavily propelled by the dynamic services sector alongside crucial gains in industrial and manufacturing activities.

    Government authorities have expressed confidence that the projected 5.9% to 6.1% growth window for the full year is highly achievable if current fiscal discipline is maintained.

    “The latest numbers reveal an economy that is expanding continuously while capturing much-needed price stability,” remarked Dr. Alhassan Iddrisu, Government Statistician. “The services and industrial sectors are consistently anchoring this expansion, ensuring that our macroeconomic recovery translates into broader industrial output, even as we monitor external variables closely.”

    Navigating Downside Risks

    Despite the glowing growth outlook, local industry players and financial experts urge a cautious approach. Elevated global oil prices caused by overseas instability have the potential to filter into domestic inflation, posing a direct threat to corporate operational budgets and consumer purchasing power.

    For many local enterprises, the challenge lies in bridging the gap between positive high-level statistics and the reality of high commercial lending rates on the ground.

    “We cannot ignore the downside risks highlighted by global financial developments,” warned a representative from the Association of Ghana Industries (AGI). “A 6% growth environment is excellent news for attracting foreign direct investment, but domestic policymakers must ensure we cushion local industries against expensive utility costs and import-dependent price spikes triggered by global conflicts. True stability will be defined by how well we shield our local supply chains.”

     

    With the central bank aggressively deploying its inflation-targeting framework to anchor market expectations, Standard Bank’s report highlights that Ghana is entering the latter half of 2026 as one of the standout economic performers in the Sub-Saharan region.

     

     

  • Ghana’s building inflation holds steady at 2.2% …as BoG tightens real estate controls

    Ghana’s building inflation holds steady at 2.2% …as BoG tightens real estate controls

    By Adnan Adams Mohammed

    Developers and homebuilders across Ghana are experiencing a rare period of cost predictability as the country’s building materials inflation held completely steady at 2.2 percent for the month of April.

    The structural stability offers a massive breather to a sector historically plagued by volatile import costs and sharp pricing surges.

    However, as physical input costs stabilize, the regulatory landscape is shifting dramatically. The Bank of Ghana (BoG) has announced a major policy tightening cycle, rolling out rigorous, automated property and identity checks designed to permanently root out fraud, money laundering, and speculative distortions in the commercial real estate sector.

    Macro stability lowers financial risks for developers

    The latest data from the Ghana Statistical Service (GSS) indicates that the 2.2 percent baseline represents one of the most stable structural runs for the construction sector in recent memory. The stabilization is primarily driven by a steady domestic currency, which has kept the landing costs of imported finishing materials, electrical fixtures, and machinery tightly contained.

    Reviewing the data, a senior real estate analyst at a prominent Accra-based investment firm noted that cost predictability will allow developers to finally resume stalled residential projects without fear of sudden budget overruns.

    “A steady 2.2 percent building inflation rate is exactly the signal the market needs,” the analyst stated. “For years, contractors had to bake massive, arbitrary contingency premiums into their construction bids just to protect themselves against price spikes in cement, iron rods, and roofing sheets. With inflation flat-lining at this low baseline, developers can price their projects accurately, pass those savings on to buyers, and confidently break ground on new mid-market housing developments.”

    Government Statistician, Alhassan Iddrisu, speaking at the release of the latest Prime Building Cost Index (PBCI) report last week indicated that, the PBCI rose to 136.1 in April 2026 from 133.2 in April 2025. This means the average cost of building materials increased by 2.2 percent over the one-year period.

    On a month-on-month basis, prices of building inputs increased by 1.5 percent between March and April 2026.

    The report identified glazing, plumbing, roofing sheets and electrical works as the major drivers of inflation in the construction sector. Glazing recorded the highest year-on-year inflation of 16.2 percent, followed by plumbing at 14.5 percent and roofing sheets at 13 percent.

    Central bank takes aim at dirty money in real estate

    While physical construction conditions improve, the central bank is aggressively moving to sanitize the financial side of the property market. Addressing corporate leaders and compliance officers at an extractive and financial governance forum, a high-level representative from the Bank of Ghana revealed that the real estate sector has increasingly been flagged as a primary destination for illicit funds and fraudulent transactions.

    To counter this, the BoG is mandating deep integration between commercial banks, the Lands Commission, and state identity databases to automatically verify the origin of funds used in high-value property acquisitions.

    “The Bank of Ghana is pushing for significantly stronger property checks to reduce fraud and eliminate illicit financial flows in the real estate sector,” Deputy Head of the Collateral Registry Department, Mrs. Rosemary Akabutu, stated during a policy brief. “We can no longer tolerate an environment where individuals can move massive, unverified volumes of cash into luxury residential properties without clear audit trails. By enforcing rigorous, data-driven identity matching and source-of-wealth checks across all financial institutions, we are protecting genuine investors and stabilizing property valuations from artificial inflation.”

    The central bank emphasized that these automated checks will require banks to cross-reference every major property transaction against the national Ghana Card database and the Registrar General’s beneficial ownership profiles to expose individuals using complex corporate shells to conceal ownership.

    Contractors welcome cost stability but urge credit easing

    On the ground in industrial hubs like Tema and Kumasi, local contractors are praising the flat input costs but warning that high commercial lending rates still restrict broad-based sector growth. While materials are affordable, borrowing capital to buy them remains an expensive hurdle for indigenous firms.

    “We are incredibly relieved that the prices of core materials like cement and steel have held steady through April,” an executive member of the Association of Ghana Industries (AGI) Construction Sector remarks. “It means we can honor our existing contract delivery timelines without cutting corners. But to truly unlock the building industry, the central bank’s regulatory tightening must be balanced with measures that encourage commercial banks to lower construction credit rates. Stability in material prices is excellent, but we also need affordable financing to build at scale.”

    With building material inflation expected to maintain its stable path through the next quarter and the central bank’s anti-fraud frameworks slated for full operational enforcement by July, industry experts agree that Ghana’s building sector is entering a highly disciplined, institutional era defined by transparent capital and predictable costs.

     

     

     

     

     

     

     

     

     

  • Ghana’s economic growth moderates to 7.5% in Janury as agriculture and industry soften

    Ghana’s economic growth moderates to 7.5% in Janury as agriculture and industry soften

    Ghana’s economy began the 2026 fiscal year on a steady but moderated note, with the Monthly Indicator of Economic Growth (MIEG) slowing to 7.5% in January, according to the latest data from the Ghana Statistical Service (GSS).

    While the figure represents a continued expansion of the national economy, it marks a slight deceleration from the 8.2% growth rate recorded during the same period in 2025, reflecting shifting dynamics across the country’s three main economic pillars.

    Services sector takes the lead

    The services sector emerged as the primary engine of growth in January, surging by 9.6%. This robust performance was largely anchored by the education, information, and communication sub-sectors, which have seen sustained investment and increased consumer demand over the last year.

    In total, services accounted for over half (54.3%) of the overall 7.5% expansion, further solidifying Ghana’s transition toward a service-led economic model.

    Softening in agriculture and industry

    The overall slowdown was primarily attributed to a loss of momentum in the agriculture and industry sectors compared to the previous year:

    ● Agriculture: Growth fell sharply to 4.5%, down from a high of 9.3% in January 2025. Analysts point to a moderation in the crops and livestock sub-sectors as the main reason for this cooling.

    ● Industry: The sector recorded a 7.2% expansion, a dip from the 9.7% seen a year ago. The slowdown was particularly evident in mining and quarrying, largely due to fluctuating oil and gas output.

    The CIEA perspective

    Complementing the GSS data, the Bank of Ghana’s Composite Index of Economic Activity (CIEA) showed a real growth of 8.4% for January 2026. While the CIEA and MIEG use slightly different methodologies, both indicators point to an economy that is growing but facing an “uneven” pattern across different sectors.

    Economists suggest that while the 7.5% rate is healthy by regional standards, the widening gap between the booming services sector and the slower-moving agriculture sector could pose risks for long-term food security and rural employment.

    Outlook for 2026

    Government Statistician Dr. Alhassan Iddrisu noted that the January figures reflect a “stabilizing” economy. However, he emphasized that sustaining this momentum will require targeted interventions to revitalize industrial value addition and boost agricultural productivity.

    As the government moves forward with its 2026 fiscal plans, the focus will likely remain on whether the burgeoning services sector can continue to carry the weight of national growth if the traditional “backbones” of industry and farming continue to soften.

     

     

  • Chief of Staff spearheads historic multi-agency MoU to promote data-driven governance 

    Chief of Staff spearheads historic multi-agency MoU to promote data-driven governance 

    By Adnan Adams Mohammed

    ​In a move signaled to revolutionize public administration in Ghana, the Chief of Staff, Hon. Julius Debrah, has presided over a landmark Joint Signing Ceremony of Memoranda of Understanding (MoUs) between the Ghana Statistical Service (GSS) and various Ministries, Departments, and Agencies (MDAs).

    ​The high-profile engagement, held in the capital, marks a pivotal shift toward evidence-based governance under the administration of President John Dramani Mahama.

    ​Addressing a hall filled with state officials, heads of institutions, and security top brass, Hon. Debrah underscored that the era of “guesswork” in governance is over. He emphasized that the primary objective of the MoUs is to strengthen institutional collaboration and ensure that policy decisions are backed by rigorous, credible data.

    ​”Coordination is the engine of efficient governance,” the Chief of Staff remarked. “By aligning the Ghana Statistical Service with our various ministries, we are creating a seamless flow of information that will allow us to track progress, identify gaps, and deliver development where it is needed most.”

    ​Aligning for Efficiency

    ​The ceremony highlights Hon. Debrah’s ongoing role in streamlining the functions of state institutions. The MoUs are designed to:

    ​Eliminate Duplication: Ensure that different agencies are not collecting the same data sets independently.

    ​Enhance Transparency: Provide a clear, data-backed trail for government spending and project outcomes.

    ​Accelerate Development: Allow for real-time adjustments to national development plans based on shifting economic and social indicators.

    ​A Unified Front for Progress

    ​The event saw a strong showing of institutional support, with representatives from the security services and various technical directorates in attendance. Observers have noted that this initiative reflects a “steady and strategic” approach to public service reform, positioning the GSS as the central nervous system of the nation’s planning infrastructure.

    ​The Chief of Staff concluded his remarks by urging all signatories to view the MoUs not merely as legal documents, but as a “sacred commitment to the Ghanaian taxpayer” to provide a more efficient, transparent, and responsive government.

  • Inflation hits historic low as BoG credits “prudent management”

    Inflation hits historic low as BoG credits “prudent management”

    By Adnan Adams Mohammed

    In a milestone for Ghana’s macroeconomic recovery, year-on-year inflation plummeted to 3.3% in February 2026, marking the lowest rate since the Consumer Price Index (CPI) rebasing in 2021.

    The latest data from the Ghana Statistical Service (GSS) reveals a staggering 19.8 percentage point drop from the 23.1% recorded exactly one year ago. This 14th consecutive monthly decline signals a sustained easing of price pressures that has significantly bolstered the Bank of Ghana’s (BoG) recent policy stance.

    The disinflation trend was largely driven by a cooling food market and the stability of imported goods.

    Food Inflation: Dropped to 2.4% from 3.9% in January.

    Imported Items: Saw a sharp easing to 0.6%, credited largely to the cedi’s strong performance.

    Regional Variance: The Savannah Region recorded the country’s lowest rate at -2.6%, while the North East Region hit a high of 8.9%.

    “A price worth paying”

    Reacting to the figures, Bank of Ghana Governor Dr. Johnson Asiama attributed the record lows to “prudent management,” specifically pointing to the sharp appreciation of the cedi and aggressive monetary sterilization measures.

    Addressing recent concerns regarding the central bank’s financial losses and the costs of the Gold for Reserve (G4R) programme, Dr. Asiama was candid about the trade-offs involved in resetting the economy.

    “This was delivered at a cost,” the Governor noted in an explanatory note. “But what is the real benefit to the economy? We have achieved historically low inflation and a cedi that has appreciated by more than 40%—the best performance in our history.”

    Outlook: A leaner, stronger 2026

    Dr. Asiama expressed confidence that the heavy fiscal lifting is over. He projected that as inflation settles at the lower end of the BoG’s 8 ± 2% medium-term target, the costs of maintaining these levels will “drop sharply.”

    Key pillars for the BoG’s 2026 outlook include:

    Reduced Sterilization Costs: With inflation at 3.3%, the policy rate is expected to decline, lowering the cost of mopping up excess liquidity.

    Gold for Reserve Reforms: Fees and charges for the G4R program have already been halved.

    Cedi Stability: The BoG expects the currency to remain stable throughout the year, preventing a repeat of previous valuation-led losses.

    While some analysts warn that the aggressive policy interventions came at a high institutional cost to the central bank, the GSS data suggests that for the average Ghanaian consumer, the “reset” is finally yielding tangible relief at the marketplace.

    At a glance: Ghana’s inflation journey

    Period Inflation Rate Milestone

    February 2025 23.1% Post-Crisis Peak

    January 2026 3.8% Targeting the Lower Bound

    February 2026 3.3% Lowest since 2021 Rebasing

     

     

     

     

  • Why life in Ghana still feels expensive amid single digit inflation

    Why life in Ghana still feels expensive amid single digit inflation

    By Adnan Adams Mohammed

    For the average shopper at Makola Market or Kejetia, the news headlines last week might feel like a different reality.

    The Ghana Statistical Service (GSS) has just announced that headline inflation has plummeted to 3.8% for January 2026 the 13th consecutive monthly decline and the lowest rate since the 2021 rebasing.

    On paper, Ghana is a macroeconomic superstar. But on the ground, the common refrain remains: “Why are my groceries still so expensive?”

    Economic experts are now stepping forward to bridge the gap between these stellar statistics and the daily struggles of the Ghanaian consumer. Their message is clear: do not confuse a slowing car with one that is moving in reverse.

    Understanding the “Slow-Motion” Rise

    Associate Professor of Economics at the University of Ghana, Prof. Festus Ebo Turkson, clarified last week that a drop in inflation is not a “sale” on goods and services.

    “When inflation is reducing, it doesn’t mean prices are reducing,” Prof. Turkson explained during an interview on Joy FM. “It means the rate at which prices are increasing has slowed down compared to last year.”

    To put this in perspective, if a bag of sachet water cost GHc 10 last year and inflation was 50%, it would have jumped to GHc 15 At today’s 3.8%, that same bag isn’t going back to GHc10; it is simply moving to GHc15.57 instead of GHc20. The “pain” is still there; it just isn’t intensifying as quickly as it used to.

    The “Ginger” Effect: Why Your Basket Varies

    While the national average is 3.8%, the reality for your specific pocket depends on what you buy. Prof. Turkson noted that the “basket of goods” used by the GSS is an average. While a stable Cedi might keep the price of imported electronics steady, local supply chain issues might send the price of ginger or onions skyrocketing far beyond the 3.8% average.

    Dr. Seyram Kawor, a senior lecturer at the University of Cape Coast (UCC) Business School, attributes the current stability to two main “medicines”:

    One is tight monetary policy through the Bank of Ghana’s disciplined approach to interest rates.

    The other is improved reserves: External reserves now cover four to five months of imports, providing a buffer that keeps the Cedi steady.

    The Silver Lining: Why 3.8% Actually Matters

    If prices aren’t going down, why should we celebrate? According to economic analyst Prince Charles Quao, low inflation is the “silent engine” of a healthy economy.

    Dr. Kawor noted that food inflation has eased to approximately 3.9%, thanks in part to better harvests. This is a crucial metric for a country where a significant portion of household income is spent on food.

    However, the consensus among experts is patience. The benefits of 3.8% inflation are gradual. It creates a “stable floor” upon which the economy can grow. For the average Ghanaian, the relief won’t come from lower prices at the supermarket today, but from the hope that their wages will finally have a chance to catch up with the cost of living.

    As Prof. Turkson aptly put it: “Relative to a year ago, the extent to which prices are increasing is certainly lower now.” In the world of economics, sometimes no news or at least, slow news is good news.

     

     

  • MPC Watch: markets brace for rate cut as Ghana’s disinflation defies gravity

    MPC Watch: markets brace for rate cut as Ghana’s disinflation defies gravity

    By Adnan Adams Mohammed

    Financial market players have all their ears and eyes set on the Bank of Ghana’s Monetary Policy Committee (MPC) as they deliberate on the direction of the benchmark Monetary Policy Rate (MPR) at a pivotal moment for the nation’s economic recovery.

    The policy decision, to be disclosed by Governor Dr. Johnson Pandit Asiama tomorrow Wednesday, January 28, 2016, will set the tone for borrowing costs and investor sentiment for the next two months. As Ghana’s economy continues its steady disinflation trajectory, the consensus among stakeholders is clear: the time for a bold “Policy Rate cut” has arrived.

    A Historic Shift in Strategy

    The MPC in November 2025 trimmed the MPR by 350 basis points to 18.0%, marking the third consecutive aggressive cut in a cycle of monetary easing. This move reflected a dramatic improvement in price stability.

    The primary catalyst for this dovish stance is the collapse of inflation. The latest data from the Ghana Statistical Service (GSS) shows headline inflation for December 2025 falling to 5.4%. This is not just the lowest in decades; it is officially below the floor of the Bank’s medium-term target band of 6%–10%.

    “Inflation has eased faster than we anticipated,” Governor Asiama noted in a recent media engagement. “With stability restored, 2026 is about consolidation and ensuring that stability translates into durable confidence.”

    Why Analysts Expect a 14.5% Rate

    Financial market forecasters are increasingly vocal in their calls for a fresh cut. Analysts tracking the MPC ahead of the January 28 announcement have flagged expectations of another 350-basis-point reduction. If realized, the policy rate could fall to approximately 14.5%.

    Several factors bolster this argument:

    ● Cedi Stability: Buoyed by stronger foreign exchange reserves and consistent inflows, the Ghana cedi has remained remarkably stable, neutralizing the risk of “imported inflation.”

    ● Real Interest Rates: With inflation at 5.4% and the MPR at 18%, the “real” interest rate remains exceptionally high. Experts from the Centre for Policy Analysis (CPA) argue that this provides significant “buffer room” to lower nominal rates without risking capital flight.

    ● Fiscal Discipline: Tight coordination between the Ministry of Finance and the Central Bank has reduced the need for the BoG to finance government deficits, allowing the MPC to focus purely on price stability.

    The “10% Dream”: Relief for Borrowers?

    For the private sector, the stakes could not be higher. Despite the aggressive cuts in 2025, average lending rates from commercial banks remain slightly above 20%. Businesses in credit-sensitive sectors like manufacturing, real estate, and agriculture are desperate for these cuts to “filter through” to their bottom lines.

    Governor Asiama has set a high bar for his tenure, aspiring to see lending rates fall to 10% or less. While banks caution that the transmission mechanism depends on their own balance sheet conditions and competitive pressures, a sizable cut this week would be a massive signal for expansion and job creation.

    A Note of Caution

    However, the path to 14.5% is not without hurdles. Some economists urge the MPC to be “measured and forward-looking,” warning that global financial uncertainties or a sudden spike in utility tariffs could reignite inflationary pressures.

    Regardless of the final number, the outcome of this week’s meeting will be a defining moment for Ghana’s 2026 economic narrative. Whether the Bank chooses a “bold slash” or a “cautious trim,” the goal remains the same: transforming hard-won stability into tangible growth for every Ghanaian.