Inflation eases, empty plates multiply
Ghana’s inflation drops to 3.8%, a 13-month low, yet food insecurity still rises, revealing a welfare gap and regional disparities.
Ghana’s inflation rate fell sharply to 3.8 percent in January 2026, marking the 13th consecutive monthly decline and its lowest level since the 2021 CPI rebasing. The drop from 5.4 percent in December 2025 reflects broad easing across food and non-food items, with month-on-month inflation at just 0.2 percent. Locally produced goods recorded lower inflation than imports, while regional disparities persisted, with the North East posting the highest rate. Despite improving price stability, food insecurity remains elevated. According to the Ghana Statistical Service, national food insecurity rose from 35.3 percent in early 2024 to 38.1 percent by the third quarter of 2025, peaking at 41.1 percent mid-year. Rural and female-headed households remain the most vulnerable, particularly in the Upper West, North East, Savannah, and Volta regions. The data highlight a disconnect between macroeconomic stabilisation and household welfare, underscoring the need for targeted social and agricultural interventions.
Ghana’s macro and micro disconnect is becoming more pronounced, even as headline inflation paints a picture of steady relief. On paper, the numbers look impressive. Inflation has fallen to 3.8 percent, marking 13 consecutive months of disinflation and firmly returning Ghana to single-digit territory. After the 2022 crisis, when inflation surged above 50 percent and the country entered a painful debt restructuring under the IMF programme, this turnaround signals restored monetary credibility and exchange rate stability. The cedi has steadied, fiscal discipline has tightened, and month-on-month inflation has slowed to just 0.2 percent. In macro terms, Ghana has stabilised the ship. But stability in the data does not always translate to relief in the market.
An analysis of recent Consumer Price Index trends shows that a significant portion of the decline has been driven by the transport component. Fuel prices have dropped by more than 40 percent over the past three months, supported by currency stability and softer global energy prices. Transport fares, which declined by roughly 15 percent last year, have remained subdued. Because transport accounts for a relatively large share of the CPI basket, these reductions have pulled headline inflation down sharply.
That statistical relief, however, has not been evenly distributed across household spending patterns. For many families, the items that dominate daily life are not fuel or transport fares but food and cooking essentials. Prices of vegetable oil, plantain, onions and charcoal continue to rise at rates exceeding 20 percent in some areas, roughly six times the national inflation average. Households are being told inflation is falling, yet their food baskets tell a different story.
This divergence is further amplified by geography. Northern Ghana, particularly the Upper West, North East and Savannah regions, continues to record higher vulnerability and, in some cases, higher inflation rates than the national average. Food insecurity has risen from 35.3 percent in early 2024 to 38.1 percent by the third quarter of 2025, peaking at 41.1 percent. Inflation measures the pace of price increases, not the restoration of purchasing power. When inflation exceeded 50 percent, real incomes were severely eroded. Disinflation slows further damage but does not immediately rebuild lost income buffers.
Security and climate pressures complicate the picture. Spillover risks from instability in Burkina Faso, farmer-herder tensions, and climate variability disrupt supply chains and local production. In such conditions, even moderate national inflation can coexist with acute regional shortages. Price stability in Accra does not automatically translate into food availability in Wa or Yendi.
The Bank of Ghana has responded to improving headline numbers with an aggressive easing cycle. Since last year, it has cut the policy rate by a cumulative 1,250 basis points to 15.5 percent. Commercial lending rates have adjusted downward, and the expectation is that lower borrowing costs will stimulate credit and support recovery. From a macro perspective, the easing is logical. Restored stability creates room to pivot from crisis containment to growth support.
Yet risks remain. Ghana’s external position is still heavily dependent on gold and cocoa. A sharp reversal in commodity prices could pressure export revenues, weaken the cedi and complicate debt servicing just as the IMF programme approaches its exit phase. Within the banking sector, concerns persist that economic shocks could impair repayment capacity and push non-performing loans higher.
Beyond financial stability lies a deeper structural issue. Food security is shaped less by short-term price movements and more by productivity and access. Education levels, farm size, access to credit, irrigation coverage, rural roads and extension services all determine whether households can withstand shocks. Female-headed households remain disproportionately vulnerable due to limited land ownership rights and restricted access to finance. These structural constraints cannot be solved by monetary policy alone.
What Ghana’s data reveal, therefore, is an economy moving at two speeds. The macroeconomy is stabilising. Monetary credibility has been restored. Inflation is anchored. But the rural household economy remains fragile, particularly in the north. Price stability restores credibility in financial markets. Food security restores legitimacy at the ballot box and in the village.
The policy task now shifts from firefighting to transformation. Agricultural productivity reforms, irrigation expansion, rural road investment, and targeted social protection must complement macro discipline. Without these, Ghana risks settling into a technically stable but socially strained equilibrium, where inflation is low but vulnerability remains high. Inflation control was the first battle. Converting macro stability into inclusive recovery is the next one.