Ghanaians for years have been feeling the pinch of soaring food inflation leaving many low-income households struggling to keep up with the skyrocketing cost of living. With food inflation being the main driver of the headline inflation in Ghana, from a plate of rice to a simple loaf of bread, nothing is spared.
Periodic data published on the Consumer Price Index (CPI) published by the Ghana Statistical Service (GSS) confirms that food inflation for many months now have been on an upward trajectory consistently rising to worsen the plight of Ghanaians. For instance an analysis conducted by The High Street Journal reveals a steady increase in food inflation, starting from as low as 19.1% in August and rising to 28.3% in January 2025.
Sadly the latest World Bank Food Security Update published this month, Ghana was named as the country with the highest food inflation rate among all low middle-income countries in Africa. Ghana ranked 1st with a food inflation rate of 28.3% followed by Egypt and Zambia with a rate of 20.8% and 19.2% respectively.
Sadly and ironically, this development comes amid the huge agricultural potential of the country. Many concerned Ghanaians feeling the pinch of the menace on their budgets continue to ask how best this situation could be addressed.
It is in the light of this that financial analyst and banking consultant, Dr. Richmond Atuahene has proposed some pracitical strategies, if implemented, could held tame food inflation.
The Cause
Dr. Richmond Atuahene says the food inflation canker in the country is driven by several factors. In a policy brief copied to The High Street Journal, he highlighted some of the major causes of the situation.
Cedi Depreciation
Notable among them is the persistent depreciation of the local currency. As the currency continues to lose value against major trading currencies, given the import-dependent nature of the economy, the cost of imported food products and agricultural inputs rise. Inputs such as fertilizers, chemicals, seeds, machinery and equipment increase in cost and hence resulting in an increase in cost of food production. These added costs trickle down to consumers making food expensive.
High Fuel Prices
The impact of the persistent increase in fuel prices, Dr. Atuahene says has a link to the ever-rising food prices. Global demand and geopolitics have consistently caused an increase in fuel prices on the international market. This trickles down to prices at the pumps translating into high transport cost. Since most food items are transported from the rural areas to the urban markets, the high transport cost is mostly compensated by traders increasing the price of their food items.
Poor Transportation Networks
The impact of the above is even made worse for a country where there are a lot of poor road and railway infrastructure making food distribution costly and inefficient.
Climate Change & Extreme Weather Conditions
Playing a significant role in the cost of food is extreme conditions. Droughts and floods have become very consistent in the country causing severe havoc to agricultural production, reducing yields and driving up prices. For instance, Ghana experienced a very severe drought in the northern part of the country last year. The situation was worsened by the flooding caused by the opening of the Bagre Dam in Burkina Faso which further washed away large hectares of farmlands.
Illegal Mining/Galamsey
Another critical factor playing a role in the menace of food inflation, Dr. Atuahene indicates is the canker of illegal of mining widely known as a galamsey. Illegal mining, the authorities confirm is rapidly destroying large hectares of farm in addition to arable farmlands, especially in cocoa growing regions. COCOBOD confirms that about 20,000 hectares of the cash crop have been lost to illegal mining in Ashanti and Western Regions alone. This implies the hectares could be higher if other regions such as Central, Eastern, and Western North are added. If cash crops are being destroyed due to illegal mining, one can imagine what is happening to normal food crops.
The Way Out
The financial analyst insists addressing inflation is not just about the monetary policies of the Bank of Ghana which fail to recognize the supply-side of the issues driving inflation. He admits although the situation looks dire, with the right polices, the country can overcome its food inflation crisis. He therefore makes a number of recommendations;
Investment in Modern Irrigation Systems and Farming Techniques
Climate Change and extreme weather conditions, maybe, have come to stay. However, Dr. Atuahene insists the country can engage in “climate-change proof” agriculture. This can be done by deliberately investing in irrigation systems. This will wean the country’s agriculture from the traditional rain-fed agriculture and enable food production all-year-round.
Proper Transportation Network
With food mostly produced in the hinterlands and transported to the urban and peri-urban centers, the financial analyst says improvement in transportation networks, i.e roads and railways are not negotiable. Improving transportation networks will help move food efficiently from farms to urban centers, reducing costs and stabilizing prices.
Storage Facilities & Supply Chains’ Enhancement
Investing in the expansion of modern storage facilities, Dr. Atuahene says can help to prevent the huge post-harvest losses that have characterized farming in Ghana. This, he says needs to be complemented with streamlining food distribution systems to ensure timely delivery, minimize waste and control prices.
Ensuring Cheaper & Affordable Loans for Farmers
To deliberately reduce the cost of farming, Dr. Atuahene maintains cheaper and affordable loans are inevitable. In his view, it is unconscionable for a critical sector such as agriculture to compete with other sectors for loans at market rates. The financial analyst says the government must be deliberate about reducing the cost of loans for the agricultural sector. Such an arrangement, he believes will empower local farmers to increase production and keep food prices in check.
The Galamsey Menace
The illegal mining menace eating away farms and arable farmlands, Dr. Atuahene says must not be treated with kids gloves. He says it requires drastic measures. He wants a state of emergency to be declared on the canker agreeing that anyone found destroying the country’s waterbodies, forest, and farmlands through illegal mining should be dealt with ruthlessly. According to him, the security agencies should be mandated to deploy all means necessary to flush out the culprit putting the future of the country in jeopardy.
Dr. Atuahene concludes that Ghana stands at a critical crossroads, either take bold, decisive and practical action to tackle food inflation or watch as millions sink deeper into economic hardship. He says the solutions are clear, the urgency is undeniable, and the time to act is now.
