Ghanaian drivers are bracing for higher costs after the Ghana Insurers Association (GIA) ordered a 10% increase in motor insurance premiums, effective February 1, 2025.
The move, finalized during an emergency industry meeting on January 31, comes as insurers grapple with soaring operational costs fueled by inflation and a weakened cedi. The hike, though modest, adds to the financial strain on households and businesses already navigating a 23.8% inflation rate and a currency that lost nearly a quarter of its value against the U.S. dollar in 2024.
The National Insurance Commission (NIC) initially paused the tariff adjustments in December 2024, citing “unforeseen developments,” but the GIA has since pushed forward, warning members to comply or face sanctions. Kingsley Kwesi Kwabahson, CEO of the GIA, defended the decision, stressing that insurers have absorbed costs for years. “Premiums rose just 20% over three years, while spare parts—critical for claims—skyrocketed due to currency drops. This isn’t sustainable,” he said. Private vehicle owners will now pay at least GH¢530 annually, up from GH¢482, while commercial drivers, including taxis, face a rise from GH¢637 to GH¢701. Motorcyclists, deemed high-risk, bear the sharpest jump: premiums surged 20% to GH¢302.
The GIA insists the increases comply with Ghana’s Insurance Act of 2021, though critics question timing amid a cost-of-living crisis. Insurers also face lingering fallout from the government’s 2022 Domestic Debt Exchange Programme, which drained liquidity from financial institutions. Meanwhile, Deloitte’s January 2025 Global Economic Outlook warns Ghana and neighboring Nigeria of persistent threats from inflation, debt, and currency instability. Yet the report strikes a cautiously optimistic tone, projecting Ghana’s economy to grow 5.1% in 2025, buoyed by debt restructuring and fiscal reforms.
For drivers, the premium hike underscores a painful reality: economic recovery remains uneven. While the Bank of Ghana’s monetary policies have slightly eased inflation, everyday Ghanaians—particularly those reliant on vehicles for income—are caught between rising costs and stagnant wages. The GIA’s move, though framed as essential for industry survival, risks deepening public frustration. As one Accra-based taxi driver put it, “Everything goes up except our fares. How long can we keep moving?”
The government’s ability to stabilize prices and restore confidence in the cedi will likely determine whether this insurance hike is a temporary setback or a symptom of deeper systemic challenges. For now, motorists have little choice but to pay up—or park their vehicles for good.
