By:Kenneth Appiah Bani.
Ghana’s inflation rate has ended the year 2024 at 23.8%, which is higher than the government’s target of 15% and the Bank of Ghana’s revised target of 18%. This means that the country will have to go back to the drawing board and discuss new policies with the International Monetary Fund (IMF) to get inflation under control.
The Bank of Ghana Governor, Dr. Ernest Addison, says that the high inflation rate requires immediate attention and consultation with the IMF. He notes that the country needs to discuss specific policies with the IMF to achieve its goal of single-digit inflation.
The Bank of Ghana has also revised its timeline for achieving single-digit inflation. Initially, the target was to achieve this milestone by the first quarter of 2026, but now it’s likely to happen in the second quarter of 2026. However, this depends on the incoming government’s economic policies.
So, what happened to inflation in 2024? It started the year at 23.5% and peaked at nearly 25% in March due to exchange rate fluctuations. It then improved to 20% by August but climbed back up to 23.8% in December. The main drivers of this increase were food prices, supply chain disruptions, and transportation costs.
The IMF has been working with Ghana since May 2023 to restore macroeconomic stability and ensure debt sustainability. As part of this program, the IMF will send a delegation to Ghana from February 10 to 14, 2025, to discuss crucial economic issues. The team will focus on establishing dialogue with the new administration, conducting economic reviews, and providing guidance on fiscal policy and budget planning .
The discussions will also cover strategies for revenue generation and improving Ghana’s tax-to-GDP ratio. This visit is a continuation of Ghana’s collaboration with the IMF to achieve economic stability and secure international financial backing. The delegation will assess the country’s economic reform progress, fiscal performance, and identify areas for future economic development initiatives.
