Ghana has highest inflation rate in Africa

• Posted on June 23, 2016
• by Nana Kwesi Coomson
• Comment

With its inflation rate of 18.9 per cent, Ghana has the highest inflation rate in Africa and the most rampant price instability among its peers.

The country presently has the highest interest rate on the African continent with Treasury bill rate at an average of 22.8 per cent and lending rate of 32 per cent.

A cursory look at inflation rates of some Sub Saharan African countries by Business Finder indicates that cost of living in Ghana is quite high compared to most African countries.

For instance, Nigeria with its recent increases in prices of petroleum products has an inflation rate of 15.6 per cent, an interest rate of about 18 per cent and lending rate of 24 per cent. Ivory Coast and Burkina Faso under UEMOA have inflation rates of 2.30 and 2.31 per cent respectively. Their money market rate is about 5 percent.

Liberia and Gambia have inflation rates of 7.10 and 9.80 percent whiles the yield on their money markets are about 10.0 and 13.0 percent respectively.

While Kenya has an inflation rate of 5.0 per cent, its interest rate is about 8.0 per cent. Tanzania also has an inflation rate of 5.2 per cent and an interest rate of about 12.0 percent.

South Africa has an inflation rate of about 6.2 per cent and a yield of about 7.0 per cent on its money market. Mauritius has the lowest inflation rate of 0.8 per cent in Sub Sahara Africa and an interest rate of 2.72 per cent.

In North Africa, Egypt has an inflation rate of 12.3 per cent and interest rate of about 12.96 percent, whilst Tunisia has inflation and interest rates of 3.6 and about 4.5 percent respectively.

In a related development, Ghana has been ranked among countries in sub-Saharan Africa with the lowest consumer purchasing power.

Cost of living in Ghana is also the fourth highest in sub-Saharan Africa based on a basket of selected items.

Managing Director of Nielsen West Africa, a global marketing research firm, Lampe Omoyele, disclosed this in Accra when he delivered a lecture organized by the Chartered Instituted of Marketing Ghana (CIMG).

Mr Omoyele also said the cash outlay for Ghanaians is one of the highest in sub-Saharan Africa.

Purchasing power is important because, all things being equal, inflation decreases the amount of goods or services you would be able to purchase.

Consumer purchasing power indicates the degree to which inflation affects consumers’ ability to buy.

Ghana recorded $27.50 for the food basket item in 4th position while war-torn South Sudan came 1st with $38.60. Angola placed 2nd with $33.57 while Democratic Republic of Congo was 3rd with $28.80.

Meanwhile; transport; housing, water, electricity, gas and other fuels; education and recreation and culture recorded inflation rates higher than the non-food average of 25.0 percent.

This is according to the inflation rates released by the  Ghana Statistical Service.

Vegetables; oil and fats; fruits; mineral water and soft drinks; coffee, tea and cocoa as well as meat and meat products also recorded inflation rates of more than the food groups average of 8.5 percent.

By Augustine Amoah