Accra: In Ghana today, a quiet but important economic shift is taking place. After a period of intense price increases, inflation has been declining.
According to Ghana Web, Ghana's annual inflation averaged about 39-40% in 2023 and fell to roughly 20-23% in 2024. It continues to fall.
On paper, this is a significant improvement. Policymakers, economists, and international partners often interpret this trend as a sign that the economy is stabilising after years of turbulence driven by currency depreciation, global shocks, and domestic fiscal pressures. Yet across markets, trotro stations, campuses and offices in Accra and beyond, the reaction is very different.
'Rice is more expensive than last year.' 'Transport fares haven't come down.' 'Everything still feels costly.' The answer lies in a simple but often misunderstood truth that lower inflation does not mean lower prices.
Inflation measures how fast prices are increasing, not whether they are high or low. It is calculated as the percentage change in the Consumer Price Index (CPI), which tracks the cost of a basket of goods and services such as food, transport, housing, and utilities. When inflation is high, prices are rising quickly. When inflation falls, prices are still rising, but more slowly.
For example, JoyNews reported that Ghana's inflation rate averaged 40.27% in 2023, the highest in over two decades. Even though inflation dropped in 2024, it remained above 20%, meaning prices continued to rise significantly, just not as rapidly as before.
Consider a common household staple like imported rice. Many consumers in Accra have observed that a bag of rice that sold for around GHS 300-350 in 2022-2023 rose to GHS 450-500 or more by 2024-2025 (depending on brand and market location). This is not inconsistent with falling inflation. Instead, it reflects how inflation works over time.
Transport provides another clear example. Between 2022 and 2023, Ghana experienced multiple fuel price adjustments linked to global oil prices and the depreciation of the cedi. These increases led to repeated upward adjustments in public transport fares. Even when inflation began to decline in 2024, transport fares largely remained elevated.
One of the most important concepts for understanding Ghana's situation is cumulative inflation. Inflation compounds over time. A period of high inflation permanently raises the general price level. Back-to-back increases dramatically raise the cost of living.
Another reason for the disconnect is that inflation is an average, but people experience specific prices. In Ghana, food carries the largest weight in the inflation basket; it's about 43% of the CPI. This means that if food prices rise sharply, households feel it immediately. Even if other prices stabilise, food inflation dominates daily experience.
A key driver of Ghana's inflation in recent years has been the depreciation or appreciation of the Ghana Cedi. When the cedi weakens, imported goods become more expensive, fuel costs rise, and production costs increase. Even when the cedi stabilises, as it has more recently, prices do not automatically fall.
If prices are still rising, why do economists emphasise falling inflation as a positive development? Well, because stability matters! High inflation creates uncertainty. Businesses struggle to plan. Investors hesitate. Households cannot predict future costs.
Despite these improvements, many Ghanaians do not feel relief. This is not a misunderstanding because it reflects real economic pressures. Prices rose faster than incomes, essential goods are still expensive, and there is a gap between expectations and reality.
The challenge then is more than just economic. It is also communicative. When presenting inflation data, clarity and empathy are essential. Instead of saying, 'Inflation is falling, so things are improving,' it is more accurate to say, 'Prices are still rising, but not as fast as before.'
Bridging the gap requires explaining concepts in simple terms, using real-life examples, and acknowledging people's experiences. Economic communication should connect numbers to everyday life, not separate them.
Recent data suggest Ghana's inflation has continued to decline sharply into 2025 and 2026, even reaching single digits in early 2026. This marks a significant turnaround from the crisis period. However, the key challenge remains. We must translate macroeconomic progress into tangible improvements in household welfare.
Understanding this distinction is important for the general public. More importantly, it reminds us that economic progress must ultimately be felt, not just measured. Until the benefits of stabilisation reach households, the gap between data and daily experience will remain. And closing that gap remains one of the most important challenges facing Ghana's recent impressive economic recovery.