Ghana’s Hyperinflation Cools Holiday Season

Record inflation in Ghana, the highest in 21 years, is making the holiday season a struggle for many people.  The high cost of living has forced many Ghanaians to cap their expenses, including traditional travels to the countryside to spend time with relatives.  Families are instead trying to save money as the New Year approaches with uncertainty about what 2023 holds for the debt-laden West African economy.

Most Ghanaian city dwellers, like 40-year-old Florence Cudjoe, spend Christmas in the countryside with friends and relatives.  

But Ghana’s struggling economy, hit by the pandemic and Russia’s war on Ukraine, pushed inflation to a record 50.3%. 

The World Bank says the cost of food in Ghana is the highest in sub-Saharan Africa, more than doubling in the past year, with a loaf of bread nearly tripling in price. 

The costs are forcing families such as Cudjoe’s to stay in the city this holiday season.  

She says last year’s holiday season was much better, as they had money to buy food and spend quality time with family and friends in the village.  Things are very expensive now, says Cudjoe, so she must cut down on holiday expenses because she has a lot of bills to settle next year, including her children’s school fees.  She says they couldn’t even take the children out to the beach or restaurant to celebrate Christmas.

Cudjoe’s 12-year-old daughter, Priscilla, says this will go down as her worst Christmas ever.

I want to go out, she says, but my parents said they don’t have money.  Priscilla says some of her friends in the neighborhood went to KFC, the beach, and the pool to have fun, but they have stayed home all week.  She didn’t even get a Christmas dress from her mother, she says, and feels very sad.

At Accra’s busy Neoplan Station, where holiday travelers can take a bus to other parts of the country, most of the commercial drivers sit idle, waiting for passengers.

Forty-year-old driver Kojo Mintah tells VOA the poor economy forced many Ghanaians to cancel holiday travels.

“They have reduced fuel, but things are still expensive,” Mintah said. “Last year was not like this.  Last year we had COVID, but it was better than today.  This is very bad to us.”

Ghana is Africa’s second biggest exporter of cocoa and gold and was once touted as the continent’s rising economic star.  

It now, though, has been struggling to pay its debts, at a ratio of more than 80% of GDP, and its currency, the cedi, is the worst-performing on world markets. 

The high cost of living has led to sporadic protests and calls for the finance minister, Ken Ofori-Atta, to step down. 

Daniel Amarteye, an economist with the Accra-based Policy Initiative for Economic Development, tells VOA Ghana must focus more on improving domestic production.

“We need to produce goods that we have the competitive edge and also minimize importation of commodities that, in my view, are unnecessary and we have the advantage to produce same,” Amarteye said.

Despite the economic woes, President Nana Akufo-Addo still sounded optimistic for Ghana’s future in his Christmas address to the nation.

“We have had to ride turbulent storms and we have been faced with the unknown,” Nana said. “I am happy that in spite of it all, we are beginning to emerge out of the difficulties, which encourages me to say that with hard work, dedication and continued prudence in the management of the affairs of our nation, we will rise up again.”

Ghana in November announced spending cuts, a freeze on government hiring, and a hike in the value-added tax to try to turn the economy around.

The International Monetary Fund this month agreed a $3 billion credit arrangement with Ghana for the next three years to help support and revive its economy.    

Ghanaians can only hope the measures will be enough for a happier New Year.  

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