The Governor of the Bank of Ghana (BoG) highlighted during the 128th Monetary Policy Committee (MPC) meeting on January 28, 2026, that global headline inflation has gradually shifted toward central bank targets.
“Global headline inflation has gradually shifted towards central bank targets. This reflected a sustained drop in oil prices, lower food prices, declining underlying inflation, and anchored inflation expectations,” the Governor said, reflecting the MPC’s optimism that both global and domestic conditions were favourable for controlling inflation.
The Committee noted that these developments, alongside easing underlying inflation, had created a more favourable outlook and supported expectations of possible monetary policy easing to stimulate growth.
However, as of January 29, Brent crude oil prices surged above $69 per barrel, reaching $70.49, reversing some of the declines that had helped ease inflationary pressures. The rise was driven by renewed geopolitical tensions in the Middle East, including US warnings of potential military action against Iran if a nuclear agreement is not reached. President Donald Trump stated that a large US naval force in the region stands ready to act “with speed and violence, if necessary,” heightening concerns over potential disruptions to crude shipments from a region responsible for roughly one-third of global oil supply.
Potential Iranian retaliation could target shipping through the Strait of Hormuz, a critical chokepoint for crude oil and liquefied natural gas (LNG) cargoes. While Iran has expressed willingness to engage in dialogue, it has warned of an unprecedented response if provoked, even as diplomatic efforts continue. Compounding the pressure, the US dollar fell to its lowest level in nearly four years, making dollar-denominated commodities more expensive for importers like Ghana.
Ghana’s vulnerability to rising oil prices is intensified by its heavy reliance on imported crude. Oil import bills have been on a steep upward trajectory throughout 2025, reflecting both global price pressures and the economy’s dependence on foreign energy. In the first quarter of 2025, Ghana spent $1,267.7 million on oil imports, nearly doubling to $2,406.7 million in the second quarter.
The trend continued sharply in the third quarter, rising to $3,714.9 million, before surging to $5,126.6 million in the fourth quarter. This fourfold increase over the year, particularly the 38 percent jump from Q3 to Q4, underscores the significant pressure on Ghana’s external accounts and foreign exchange reserves.
Rising crude costs have immediate domestic effects, increasing transportation and production expenses that ripple across food prices, goods, and services. Even as global inflation trends appeared to be easing just days ago, these escalating potential import costs threaten to undermine the gains highlighted by the MPC, potentially complicating the Bank of Ghana’s efforts to maintain price stability.
