Ghana’s inflation is anticipated to deteriorate before showing signs of improvement, according to Professor Williams Peprah, a finance lecturer at Andrews University in Michigan, USA. However, he expressed his belief that the rate of inflationary increase would not resemble that of 2022.
In July 2023, inflation experienced a slight uptick, reaching 43.1 percent, primarily driven by a surge in food inflation, which stood at 55.0 percent.
During an interview with Joy FM in Accra, Professor Peprah explained that global commodity prices have been on the rise, while the performance of the cedi, impacting import-related inflation, has not demonstrated strong performance despite recent stability.
He further elaborated that food inflation within the country has reached alarming levels, raising questions about the effectiveness of government agricultural initiatives like Planting for Food and Jobs.
Among the findings, ten specific food items exhibited inflation rates higher than the overall food inflation rate. These items included tea and related products (150.0 percent), cocoa drinks (86.5 percent), fruit and vegetable juices (66.7 percent), cereals and cereal products (64.2 percent), sugar, confectionery, and desserts (62.7 percent), oil and fats (59.5 percent), milk and other dairy products and eggs (58.3 percent), coffee and coffee substitutes (58.2 percent), fish and other seafood (57.7 percent), and live animals, meat, and other parts of slaughtered land animals (55.2 percent).
Professor Peprah highlighted that recent reports, such as the World Bank’s Food Security Report and the International Monetary Fund’s Country Report on Ghana, indicate that food inflation is expected to worsen before any improvement is observed.
He noted, “The World Bank issued a report on Food Security Index saying we should have anticipated, and also our IMF-Ghana document had already mentioned that the situation will get worse before getting better. So, all these issues indicate that food inflation will be high.”
The global shortage of rice due to Indian policies has contributed to the recent global scarcity of rice.
“The Indians control about 40 per cent of the rice production and has sent some to part of Europe and Africa, so food prices is going to go up because of shortages.
“It is going to get worse before getting better. What I see is that maybe the rate of increase will not be as it happened in November and December last year. The rate of increase may be marginal as we noticed between the previous month of June 2023 and July 2023,” it said.
He advised the government to address some policies within the agriculture sector.
“The government should be able to address some policies and strategies in the agriculture sector to address the farmgate versus the urban market. That kind of issue can be addressed. We should anticipate that inflation will get worse before it starts to come down,” he said.
Analysts anticipate that inflation would go down when the harvest season starts in September 2023 and October 2023, but could go up again in November 2023 and December 2023 because of the festive season.