Ghana has had the highest increase in prices of food since the beginning of 2022 among countries in sub-Saharan Africa, a new report by the World Bank shows.
According to the Africa Pulse Report 2022, food prices rose by 122% since January 2022, the first of 10 countries where food inflation has gone up by more than 100% since the turn of the year.
- Ghana: 122%
- Senegal: 110%
- Uganda: 107%
- Nigeria: 106.5%
- Kenya 104%
- South Africa 102%
- Angola 101.5%
- Mozambique 101%
- Zambia 100.5%
- Congo 100%
The report, unveiled in October 2022, also forecasts slower economic growth in 2022 (3.3%) compared to 4.1% in 2021 for the region, noting that countries have depleted their public reserves with programmes previously put in place to counter crises such as the pandemic.
This situation has led to increasing debt levels across the continent with the average debt in sub-Saharan Africa expected to reach 59.5% of GDP. Higher costs of external borrowing and weakening currencies are exacerbating the situation, the report indicates.
In this vein, The World Bank has classified Ghana as a high debt distress country, with the nation’s debt GDP ratio expected to rise to 104.6 percent by the end of 2022.
Ghana’s debt-to-GDP ratio was 76.6% in 2021 and has been influenced by:
- A widened government deficit
- Massive weakening of the Cedi, and
- Rising debt service costs
The report comes as the Ghana government continues to negotiate on policies to stabilize its economy and debt as it seeks a relief package from the International Monetary Fund (IMF). In the most recent meeting, IMF officials have travelled to Ghana and met President Akufo Addo, Vice President Bawumia, Finance Minister Ofori-Atta, and Bank of Ghana Governor Addison, and their teams.
According to IMF, Ghana needs to focus on:
- Ensuring public finance sustainability while protecting the vulnerable
- Bolstering the credibility of monetary and exchange rate policies to reduce inflation and rebuild external buffers
- Preserving financial sector stability, and
- Steps to encourage private investment and growth
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