The African Development Bank (AfDB) has updated its 2024 African Economic Outlook, revealing that Ghana’s inflation rate is projected to hit 20.9% by the end of 2024. This figure exceeds the bank’s earlier forecast of 17.4% and remains well outside the Bank of Ghana’s target range of 8%±2.

Several factors contribute to this revised inflation outlook. 

Key influences include the impact of fiscal consolidation under the Post-Covid Programme for Economic Growth, the ongoing repercussions of Russia’s invasion of Ukraine, restricted access to finance and foreign exchange, and broader global economic shocks.

Despite these challenges, the AfDB suggests that prudent macroeconomic management could help mitigate some of these risks. 

The report also projects that the Consumer Price Index (CPI) in Ghana will decline to 11.1% in 2025.

On a broader scale, average consumer price inflation across Africa surged by 3.0 percentage points, reaching 17% in 2023, up from 14.0% in 2022. 

East Africa experienced the highest inflation rate at 26.5% in 2023, with Sudan leading at an alarming 245.3%. 

West Africa followed with an inflation rate of 20.3%, where Sierra Leone and Ghana recorded the highest rates.

The report highlights that the spike in inflation across Africa has significantly eroded socioeconomic gains achieved before the COVID-19 pandemic. 

This increase is attributed to several factors: higher local food prices driven by drought-related supply shortages, liquidity excesses from pandemic-era fiscal and monetary policies in 2020–21, and the effects of currency depreciation against a robust US dollar fueled by high interest rates in the United States. 

The inflation scenario varies across different regions, reflecting a complex economic landscape.