Ghana’s producer price inflation showed tentative signs of moderation in February 2025, registering a 27.6% year-on-year increase and a 1.5% monthly rise, according to government data.
While the figures reflect a slowdown from mid-2024 peaks, they underscore persistent cost challenges for businesses and policymakers navigating an uneven economic recovery.
Monthly inflation decelerated from January’s 3.6%, signaling mild relief in input costs. However, the annual rate remains sharply elevated compared to early 2024, when producer inflation hovered between 11.9% and 16.5% from February to April. The current trajectory marks a 132% surge from February 2024 levels, highlighting entrenched pressures from utility hikes, raw material imports, and currency volatility.
Sectoral Pressures
Inflation disparities across sectors reveal fragmented economic conditions. The industrial sector, which includes mining and manufacturing, recorded the steepest rates at 42.9% in February, down marginally from 43.7% in January. Mining and quarrying sub-sectors faced acute strain, with mining support services and metal ore extraction hitting 73.8% and 67.4% inflation, respectively, driven by rising operational costs and global commodity shifts.
Construction saw a sharper decline, with inflation dropping to 15.8% from 29.8%, suggesting easing material costs. Services remained stable at 7.7%, buoyed by sectors like information technology (4.2%) and utilities (9.7%), which face fewer import dependencies. Conversely, hospitality (26.5%) and transportation (22.7%) sectors grappled with fuel and labor expenses, while manufacturing inflation hit 20.8%, led by metal production and vehicle assembly.
Policy Crossroads
The government’s 2025 budget introduces measures with mixed inflationary implications. A hike in the Growth and Sustainability Levy for mining firms—from 1% to 3% of gross production—aims to capture higher gold revenues but risks deterring investment, industry groups warn. Meanwhile, a GH¢13.85 billion infrastructure push seeks to revitalize construction, though analysts caution it may inflate material and labor costs.
A newly launched “24-Hour Economy” initiative, designed to boost manufacturing output through round-the-clock shifts, could strain utilities and logistics. The reintroduction of tech-based road tolls aims to fund infrastructure but may elevate transport costs.
While recent data hints at tentative stabilization, Ghana’s path to sustained price control remains fraught. Analysts note that sector-specific strategies—such as stabilizing mining inputs or streamlining construction permits—could mitigate disparities. However, global commodity swings and fiscal policies risk prolonging inflationary cycles.
“The decline from 2024 highs is encouraging, but structural reforms are critical to shield businesses from external shocks,” said Accra-based Financial Journalist Roger A. Agana. “Sectoral targeting, not broad measures, will determine success.”
As Ghana walks a tightrope between growth and stability, the coming months will test whether policy adjustments can ease producer burdens without stifling economic momentum. For now, businesses brace for a prolonged climb toward recovery.
