A lecturer at the University of Ghana Business School, Professor Patrick Asuming, has expressed concern that prices of goods and services in Ghana are still on the rise, even though the country’s broader economic indicators have improved in recent months.
He explained that while the pace of price hikes has slowed, that does not translate to a drop in prices. “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.
There’s a disconnect between how people are perceiving the economy and what the macro numbers are telling us,” he said.
According to Professor Asuming, inflation is easing and the Producer Price Index has dropped from around 18 to 10 per cent, but that alone does not mean Ghanaians are paying less for goods and services. “Prices are still rising. They haven’t declined. The rate of increase has reduced, but that’s not the same as things getting cheaper,” he said.
He pointed out that although the cedi has appreciated, other production costs are contributing to stubbornly high prices. “The currency has strengthened, yes, but look at the other components of production tariffs are going up, wages are not going down, and domestic production costs keep rising,” he explained.
Professor Asuming acknowledged that Ghana’s fiscal outlook has improved, crediting both policy decisions and favourable global commodity prices. “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 told Joy News on Thursday, June 19.
The Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, also weighed in on the issue, offering reasons why the appreciation of the cedi has not yet resulted in lower market prices.
He explained that people stock their goods at a higher exchange rate, and so naturally, even with the appreciation of the Cedi, it takes a while for consumers to see that adjustment.
Speaking at the 124th Monetary Policy Committee (MPC) press conference in Accra on Friday, May 24, Dr Asiama assured the public that prices will eventually reflect the improved exchange rate dynamics. “However, rest assured that you will see the adjustment certainly so long as there is competition, so long as it is not a monopoly, and we will see that kind of phenomenon very soon.”
On the sustainability of the cedi’s rise, he said, “The Cedi appreciation has to be put into proper context. Much as you want to have Cedi stability in nominal terms, the important thing here is to ensure that in real terms, the Cedi is not appreciating persistently. And so the MPC went into a lot of deliberations, looked at the real movement of the exchange rate, and we think that where we are now, we don’t have that problem of real appreciation that would adversely impact our competitiveness.”
He emphasised that the appreciation is being driven by market forces rather than Central Bank interventions. “If you look at the data pack we have put out, you can see that our reserve programme is growing, so we are not using our reserves to intervene in the market, therefore, the appreciation you are seeing is driven by economic policy stance of the monetary policy, by international flows. So yes, it is appreciation; however, for us, it is about maintaining exchange rate stability.”
Earlier in the briefing, Dr Asiama confirmed that the MPC has maintained the policy rate at 28 per cent.
He noted that headline inflation had declined for four consecutive months, supported by both food and non-food components. “The external sector has continued to improve, with a record provisional current account surplus of US$2.1 billion in the first quarter of 2025, driven mainly by higher prices and increased production volumes of gold and cocoa, and strong remittance inflows. The current account surplus, together with net outflows in the capital and financial account, resulted in an overall Balance of Payments surplus of US$1.1 billion.”
He added that Ghana’s gross international reserves stood at US$10.7 billion in April 2025, equivalent to 4.7 months of import cover. The cedi, he said, had appreciated 24.1 percent against the US dollar, 16.2 percent against the British pound, and 14.1 percent against the euro by May 21, 2025.
“The latest forecast points to continued easing of inflationary pressures on the back of tight monetary policy stance, exchange rate stability, and fiscal consolidation. Inflation is expected to ease faster towards the medium-term target in the first quarter of 2026 as opposed to the second quarter as earlier envisaged, barring unanticipated shocks. Despite these positive developments, the Committee observed that the current level of inflation remains high relative to the medium-term target and will require maintaining the tight stance to reinforce the disinflation process. Under the circumstances, the Committee, by a unanimous decision, maintained the policy rate at 28 percent,” he stated.
