Economist Prof. Ebo Asuming has cautioned that while Ghana shows signs of economic recovery, inflationary pressures remain a major concern. Despite improved macroeconomic indicators and stabilizing growth, the cost of living continues to rise, eroding household incomes. Prof. Asuming attributes the lingering price hikes to structural inefficiencies, high import dependency, and weak supply chains, urging policymakers to implement long-term solutions that address both inflation and income inequality.
Prof. Asuming noted that although inflation and the Producer Price Index (PPI) have declined, the reduction does not translate into falling prices. “Prices are still rising. The rate of increase has reduced, but that’s not the same as things getting cheaper,” he said.
He pointed out a disconnect between improving macroeconomic indicators and the daily experiences of ordinary Ghanaians. “It seems to me that the financial and the monetary side of the economy has performed better, and the real side seems to be lagging,” he said.
According to him, while the cedi has appreciated and fiscal discipline has improved, production costs remain high due to rising tariffs, stagnant wages, and increased domestic input costs.
“Government has done well on the fiscal side. Our reserve position has improved, partly from policy direction and partly from luck with global prices of our exports. But when you dig deeper, it’s clear that the real economy, the part that touches people’s lives every day, isn’t recovering at the same pace,” he added.
His comments come as Ghanaians continue to ask why market prices remain high even as the cedi strengthens against major currencies.
Responding to these concerns, Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, attributed the delayed price adjustments to inventory cycles.
Speaking at the 124th Monetary Policy Committee (MPC) press conference in Accra on May 24, he explained that many traders stocked their goods when the exchange rate was higher, and it will take time for those costs to adjust.
“You can understand that some people stock their goods at a higher exchange rate, and so naturally, even with the appreciation, it takes a while for you to see that adjustment,” he said.
Dr. Asiama, however, assured that price changes would gradually be reflected in the market, especially in competitive sectors.
He also addressed the sustainability of the cedi’s recent appreciation, saying the gains are largely market-driven and not propped up by central bank interventions. “We are not using our reserves to intervene in the market… The appreciation you are seeing is driven by economic policy stance of the monetary policy, by international flows,” he said.
According to the BoG, the cedi appreciated by 24.1% against the U.S. dollar, 16.2% against the British pound, and 14.1% against the euro between January and May 21, 2025. This rebound has been attributed to tight monetary policy, fiscal consolidation, and increased market confidence.
Dr. Asiama also provided updates on the broader economic outlook. He announced that the MPC has maintained the policy rate at 28 percent as part of efforts to tame inflation and maintain price stability. Headline inflation has consistently declined over the first four months of 2025, supported by easing food and non-food inflation trends.
He reported that Ghana recorded a provisional current account surplus of US$2.1 billion in the first quarter of 2025, buoyed by strong gold and cocoa exports and remittance inflows. This led to an overall balance of payments surplus of US$1.1 billion, helping to push Ghana’s Gross International Reserves to US$10.7 billion, equivalent to 4.7 months of import cover.
Last Updated on June 21, 2025 by Senel Media
