Inflation in Ghana tends to follow a familiar, undulating pattern, making it a persistent challenge. Yet with a shift toward stronger domestic production and sound policies, there’s a path to price stability.
Prof. John Gartchie Gatsi, Dean of the University of Cape Coast Business School, suggests that by focusing on key areas like food production and fiscal discipline, Ghana can take steps to manage inflation effectively. This he revealed in an interview with The High Street Journal.
As the year draws to a close, Ghana enters a season that typically adds upward pressure on inflation. Demand for foreign currency and consumer goods surges, pushing prices higher and creating a trajectory that, as Prof. Gatsi points out, may prevent inflation from stabilizing in the coming months.
Given this seasonal trend, he doubts the government will meet its inflation target by year-end, foreseeing continued upward pressure instead.
“The positive impression about inflation going to the end of the year will not be the case. Inflation signals to develop some upward trajectory because of the fact that we have gotten to the end of the year, demand pressures will be high, and demand for the foreign currency will surge, which will infuse into inflation.” he told The High Street Journal.
Over the past five months, we’ve seen this in action, with inflation starting at 20.9% in June, rising to 21.5% in July, dipping to 20.4% in August, then climbing again to 21.5% in September, and reaching 22.1% in October.
Prof. Gatsi highlighted the central role of food inflation in this trend, particularly given Ghana’s reliance on imports, which makes the economy sensitive to global price fluctuations and currency pressures. Food inflation rose from 22.1% in September to 22.8% in October, underscoring Ghana’s vulnerability.
But he’s also optimistic, pointing out that Ghana has the productive capacity to meet much of its own food demand. Shifting toward local production could relieve some of the inflationary pressure and build resilience against external shocks.
“We need to fight very hard to control food inflation because that is an area that we have control over. That is what we have the productive capacity to produce—to stop those importations.”
While the factors driving inflation are no mystery, Prof. Gatsi argues that it’s Ghana’s response—or lack thereof—that’s the real issue.
Effective policy measures could help address these known drivers, especially in food production and spending discipline.
“Inflation is policy-driven. And when the policies are not working, we cannot fight inflation. It does not fight itself; we must roll out policies to deal with them.” he emphasized.
