Food and Fuel Key Drivers of Inflation in Ghana, GSS Reports

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Vendors sell products at a market in Accra, Ghana, on July 14, 2022. Data released by the Ghana Statistical Service (GSS) Wednesday indicated that Ghana's inflation rate rose to 29.8 percent in June, compared with 27.6 percent a month earlier. (Photo by Seth/Xinhua)
Vendors sell products at a market in Accra, Ghana, on July 14, 2022. Data released by the Ghana Statistical Service (GSS) Wednesday indicated that Ghana's inflation rate rose to 29.8 percent in June, compared with 27.6 percent a month earlier. (Photo by Seth/Xinhua)

The Ghana Statistical Service (GSS) has identified food items and fuel as significant contributors to the country’s inflation over the past seven years.

During a recent stakeholder engagement, GSS revealed that 13 out of 15 key items driving inflation were food-related, while petrol and transportation fares also played a notable role.

The analysis, which drew from data collected for the computation of the Consumer Price Index (CPI) and inflation, identified items like imported rice, bread, beef, yam, fresh tomatoes, cooked rice with stew, kenkey with fish, fried plantain with beans, smoked river fish, smoked herring, local gin, sea fish, and large onions as the major food drivers of inflation. Additionally, non-food contributors included petrol, and fares for public transport such as buses and trotro.

Data scientist at GSS, Simon Tichutab Onilimor, highlighted the indirect effects of fuel prices on inflation, particularly through transportation costs, which in turn influence food prices. Transportation alone ranked as a top contributor to inflation in 70 of the 72 data points analyzed.

The seasonal nature of certain items, such as yam and fresh tomatoes, also emerged as a key factor. Yam prices consistently dropped in the harvest season (August-September), only to rise sharply off-season due to inadequate storage facilities and lack of buffer stocks. Fresh tomatoes displayed significant price volatility, with sharp spikes at certain points throughout the year.

One of the more startling findings was the dramatic price surge of smoked herrings, which saw an increase of over 400% between 2018 and 2024, rising from approximately GH₵25 per kilogram to over GH₵100 per kilogram. This surge was attributed to changing consumer preferences and rising demand.

Mr. Onilimor also pointed out that broader economic factors, including exchange rate fluctuations and interest rates, have an indirect but impactful role in driving inflation. As Ghana imports a significant portion of its goods, depreciation in the currency results in higher costs, while rising interest rates increase production costs.

In response to these issues, Mr. Onilimor emphasized the importance of adopting strategic measures such as buffer stocks to stabilise prices during periods of low supply. He advocated for a multi-sectoral approach involving stakeholders from agriculture, transportation, and trade to address the root causes of inflation.

“To manage inflation effectively, we must evaluate our food production systems, address the gap between farmgate and market prices, and improve logistics,” he stressed, calling for collaboration across ministries and policymakers.

Participants in the discussion echoed the need for targeted interventions, especially for food inflation, which remains the dominant driver of overall inflation. They emphasized the potential for mitigating seasonal price fluctuations through better infrastructure, buffer stock systems, and improved domestic food production.

“Inflation reflects the daily struggles of Ghanaians to afford basic necessities. We need strategic action to ensure economic stability and improve livelihoods,” Mr. Onilimor concluded. He also noted that international efforts would play a crucial role in ensuring affordability and meeting the inflation target of 8% ±2% as outlined by the Bank of Ghana.

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