Faith Nyasuguta
Ghana’s economy is showing signs of recovery as inflation continues to decline for the second consecutive month under President John Mahama’s new administration. The latest data from Ghana’s statistical office indicates a steady easing of inflationary pressures, suggesting a positive economic trajectory.
According to the Ghana Statistical Service, the country’s inflation rate dropped slightly from 23.8% in December to 23.5% in January on a year-over-year basis. This marked the first decline in inflation in five months and was the first major economic report released since Mahama’s re-election. The downward trend continued in February, with inflation easing further to 23.1%, reflecting sustained progress in stabilizing consumer prices.
Government Statistician Samuel Kobina Annim, addressing the media in Accra on Wednesday, highlighted that overall prices in February rose by 1.3%. The decline in inflation has been driven by falling food and non-food inflation rates. Food inflation dropped from 28.3% to 28.1%, while non-food inflation fell from 19.2% to 18.8%, indicating a broad-based reduction in price pressures across different sectors of the economy.
Experts suggest that factors contributing to the decline include improved supply chains, lower fuel prices, and a more stable exchange rate for Ghana’s currency, the cedi. Wilson Elorm Zilevu, an economist at Accra-based Databank Group, noted that these developments could pave the way for monetary policy adjustments by the central bank.
The Ghanaian cedi has remained relatively stable, reinforcing expectations that the Bank of Ghana may soon lower interest rates, which currently stand at 27%.
Bloomberg analysts suggest that this decline in inflation could give the central bank room to cut interest rates for the first time since September, a move that could further stimulate economic growth. However, policymakers are treading carefully, as inflation remains above desired levels.
Recently, Ghana’s central bank opted to maintain its interest rate for the second consecutive month, signaling a cautious approach to managing inflationary risks. The decision aligns with the government’s strategy of implementing tighter budgetary policies under President Mahama’s administration, aimed at ensuring long-term economic stability.
While challenges remain, Ghana’s continued inflation slowdown and steady currency performance indicate a shift towards greater economic resilience. The coming months will be crucial in determining whether the government’s fiscal and monetary strategies can sustain this momentum and drive broader economic recovery.
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