Ghana has recorded its lowest inflation rate in more than three years, as the country’s remarkably strong currency continues to reduce the cost of goods brought in from abroad.
The West African nation’s inflation rate fell to 18.4% in May, down from 21.2% the previous month, marking the fifth consecutive month of declining price rises. Government Statistician Alhassan Iddrisu announced the figures to reporters in the capital, Accra, on Wednesday, noting that prices rose by just 0.7% during May itself.
Read Also: President Tinubu flags off Afam 2, commends Sahara Power Group for adding 180mw to national grid
Ghana, which produces more gold than any other African country, has benefited enormously from soaring gold prices this year. This surge has driven a spectacular 44% increase in the value of Ghana’s currency, the cedi, making it the world’s best-performing currency by Tuesday’s close.
The cedi’s remarkable performance, combined with falling global oil prices, has helped control inflation that had remained above 20% for the past three years. However, the currency did weaken slightly on Wednesday, dropping 0.1% to 10.25 cedis per US dollar by 10:12 a.m. in Accra.
Despite the overall improvement, certain sectors continue to face significant price pressures. Food costs rose by 22.8% whilst non-food items increased by 14.4%, according to Iddrisu.
The encouraging inflation figures may prompt Ghana’s central bank to reduce interest rates when it meets next month. The bank kept rates unchanged at 28% in May, but economists believe cuts are now inevitable.
