Recent signs of easing inflation in Ghana and Nigeria could be undermined by escalating global trade disruptions, Deloitte West Africa cautioned in a new economic analysis.
The advisory firm warns that fresh U.S. tariffs targeting $18 billion in Chinese imports threaten to reignite price pressures across West Africa’s two largest economies, complicating central banks’ efforts to stabilize living costs.
Ghana’s headline inflation slowed to 22.40% year-on-year in March 2025, marking its third consecutive monthly decline, as a stabilized cedi helped slash monthly price growth from 1.30% to 0.2%. Yet Deloitte notes consumer sentiment remains strained, with market prices yet to reflect statistical improvements. “Upcoming supply chain shocks from protectionist trade policies could reverse disinflationary gains,” the report states, citing risks of costlier imports for fuel, machinery, and consumer goods.
Nigeria faces parallel challenges despite benefiting from falling global crude oil prices, which may ease domestic fuel subsidies. Analysts warn rising inflation could weaken the naira further by spurring foreign exchange demand, particularly if foreign investors retreat from emerging markets. Deloitte estimates a 10% increase in global container shipping costs—a likely outcome of prolonged trade friction—would add 1.2–1.8 percentage points to Nigeria’s inflation rate within six months.
Both economies remain vulnerable to imported inflation due to reliance on foreign-made essentials, from Ghana’s pharmaceutical imports to Nigeria’s refined petroleum needs. Deloitte stresses that monetary policy alone cannot buffer these shocks, urging governments to accelerate local production incentives and diversify import partners.
The warning arrives as African nations brace for spillovers from escalating U.S.-China tensions, which have already redirected 12% of global trade flows since 2023. Ghana and Nigeria’s central banks now walk a policy tightrope: maintaining interest rates high enough to curb inflation without stifling fragile economic recoveries.
Historical patterns underscore the risks. During 2018–2020 U.S.-China tariff exchanges, Ghana’s inflation spiked by 5.7 percentage points due to supply bottlenecks. With over 30% of Nigeria’s consumer goods linked to Chinese manufacturing inputs, similar disruptions could strain households still recovering from 2024’s subsidy reforms.
As West Africa’s economic engines navigate this precarious phase, Deloitte’s analysis highlights a regional imperative: building resilient trade frameworks to withstand external volatility. The coming months will test whether fiscal reforms and regional partnerships can offset global headwinds threatening to erode recent progress.
