Ghana’s monthly inflation rate soared to a 10-month high in May, driven by a sharp slump in the cedi, which led to a surge in the cost of non-food items.
Prices rose 3.2% last month, the highest increase since July, Government Statistician Samuel Kobina Annim reported in Accra on Wednesday.
Despite this, the annual inflation rate decreased to 23.1% from 25% in April, due to favorable base effects, Bloomberg reported.
Major African economies including Ghana is expected to experience inflation ease into next year. Ghana’s inflation averaged 40.3% last year but is projected to decrease to 18.7% this year and further drop to 12.1% in 2025 according to Reuters.
The cedi has depreciated almost 14% against the dollar in the past three months, making it the worst-performing currency among those tracked by Bloomberg.
Meanwhile, the country’s dollar bond maturing in 2030 advanced 0.41 cents to 68.3 cents on the dollar, following the country’s memorandum of understanding with its official creditors on a debt restructuring plan. This agreement paves the way for the International Monetary Fund to make its next disbursement of $360 million to the West African nation.
The cedi’s slide has been driven by increased foreign-exchange demand for imports and a decline in cocoa earnings. Revenue from cocoa exports, which Ghana uses to defend its currency, fell by almost half in the first four months of this year. Adverse weather, disease, smuggling of the beans, and a shortage of fertilizer have curtailed the output of this chocolate ingredient by the world’s second-biggest producer.
Companies raised their prices at a much faster pace in May, with the rate of inflation reaching its highest level in almost 18 months, according to the S&P Global Ghana Purchasing Managers’ Index.
