The general price levels of goods and services has seen a marginal decline ever since it recorded its highest figure since the Ghana Statistical Service (GSS) started applying the new series to the calculation of the consumer price index.

The year-on-year inflation in January 2020 recorded 7.8 percent, indicating a 0.1 percentage point lower than recorded in December 2019; and 0.4 percentage point lower than the highest figure (8.2 percent in November) it has ever recorded since August 2019 when the rebasing took effect.

Three sectors were the main drivers of the January inflation.

  • Alcoholic beverages, tobacco and narcotics recorded 11.1 percent
  • Transport hit 10.5 percent
  • Recreation, sports and culture recorded 9.0 percent.

Overall, the food and non-alcoholic beverages inflation was 7.8 percent; and non-food inflation recorded 7.9 percent. Inflation for imported goods also hit 5.8 percent while that of locally-produced goods recorded 8.7 percent.

In terms of regional differences, the Central region, surprisingly surpassed the capital to record the highest rate of inflation of 10 percent; while Accra, which has always maintained the top spot recorded 8.8 percent. The Ashanti Region, on the other hand, recorded the least rate of 5.6 percent.

Ghana Statistical Service (GSS), 2020

Ghana Statistical Service (GSS), 2020

The marginal decline in January inflation gives the business community an iota of hope that lending rates will, in the near possible future, come down – at least, marginally – if inflation continuous in this trajectory. Businesses have expressed disappointment in how lending rates in the country have remained high, making it difficult for them to go to banks for debt financing to expand their business.

The Bank of Ghana, in January, maintained the policy rate at 16 percent for the sixth consecutive time, largely due to fear over inflationary pressures which may emanate from government’s excessive spending ahead of the December elections. The Monetary Policy Committee (MPC) explained that even though inflation outlook remains balanced, it still has to be cautious, hence, the decision to hold it.