The reported headline inflation rate of 3.8 percent in January 2026 has become a flashpoint for debate, with economists, political analysts, and oppos
The reported headline inflation rate of 3.8 percent in January 2026 has become a flashpoint for debate, with economists, political analysts, and opposition figures warning that the figure may mask the everyday economic struggles of most Ghanaians.
The government, through the Minister for Government Communications, Felix Kwakye Ofosu, hailed the low inflation as evidence of sound economic management, citing historical achievements under the National Democratic Congress (NDC), including a 14.4 percent growth rate in 2011, a single-digit inflation streak lasting 33 months between 2010 and 2012, and the highest annual cedi appreciation of 40.7 percent against the dollar in 2025.
Felix Kwakye Ofosu emphasized that the country’s foreign reserves reached $13.8 billion at the end of 2025, with an import cover of 5.7 months, arguing that these figures demonstrate macroeconomic stability.
However, critics argue that these headline figures do not reflect the lived reality of the majority of Ghanaians.
Dennis Miracles Aboagye, spokesperson for former Vice President Mahamudu Bawumia, pointed out that despite improvements in currency value, inflation reduction, and fuel costs, the government has struggled to address persistent issues affecting workers and households.
“To have inflation drop from 23 percent to 3 percent, the dollar from 14 to 10, and fuel from 14 to 9, yet see the cost of living rise, is contradictory,” he said.
According to Ghana Statistical Service data, the recent inflation reduction is driven largely by the transport sector, which recorded a deflation of 5.9 percent in January, down from -5.0 percent in December 2025.
Analysts note, however, that this sector primarily benefits a minority of Ghanaians—the so-called “green-caged group”—who can import vehicles and purchase fuel in bulk.
The majority of citizens, referred to as the “red-caged group,” continue to struggle with rising costs in essential goods and services.
Observers argue that while headline inflation may be low, underlying economic pressures remain significant. Narrow Money—a measure of money available for daily transactions—has shown a drastic slowdown in growth, suggesting reduced liquidity in the hands of ordinary Ghanaians.
This has real-world consequences for wage earners and public sector workers, including cocoa farmers awaiting payment, teachers and nurses owed nearly a year’s salary, and university staff striking over allowances and welfare concerns.
Critics contend that the government’s focus on inflation statistics as a public relations tool risks diverting attention from these pressing social and economic challenges.
They urge policymakers to prioritize prompt salary payments, improved welfare, and policies that directly address the rising cost of living, especially for the most vulnerable.
Economic analysts note that inflation is influenced by both supply and demand factors.
Current trends suggest that demand-side pressures—rather than supply-side costs—are driving the real hardship experienced by most citizens.
While government reports highlight falling transport costs and currency appreciation, many Ghanaians continue to face higher prices for daily necessities, tuition fees, and housing, highlighting a disconnect between statistical indicators and the lived experience of ordinary households.
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