INFLATION for food and non-alcoholic beverages has maintained and deepened its dominance over non-food inflation for the second month running.
Figures released by the Ghana Statistical Service indicated that inflation for food and non-alcoholic beverages increased from 17.4 percent in February to 22.4 percent in March.
This was higher than 17 percent recorded by the non-food sector.
On a month on month basis, the difference between food inflation and non-food inflation was relatively lower as food inflation stood at 4.5 percent relative to 3.7 percent for non-food.
Announcing the March figures, Government Statistician, Professor Samuel Kobina Annim, said the economy also witnessed a reversal of the dominance of housing, water, electricity and gas, as the transport sector recorded the highest rate of inflation of 27.6 percent.
“The contribution of food and non-alcoholic beverages on overall inflation increased by two percent and it must be recorded that the contribution of transport recorded a much higher increase relative to food and non-alcoholic beverages which increased by 2.6 percentage points,” he stated.
Locally manufactured/ imported items
Prof. Annim also noted that the gap between locally produced items and imported items had reduced, although locally produced items continued to maintain its dominance of 20 percent inflation rate for March, with imported items recording a rate of 17.3 percent.
On the regional basis, the Brong Ahafo Region recorded the highest inflation rate of 23.1 percent which was higher than the national average.
However, the Upper East Region recorded the lowest inflation of 12.5 percent.
National inflation rate
The rate at which prices of goods and services increased over time (inflation) reached the highest level in the month of March, this year
Largely driven by the consistent increase in the cost of transportation and food prices, the March inflation rate ballooned to 19.4 percent, up from the 15.7 percent recorded in February.
The rate is the highest recorded in the country since August 2009 when the country’s inflation rate exceeded 20 percent.
It is also the seventh consecutive month that the country’s inflation has exceeded the Bank of Ghana’s target of eight per cent plus or minus two per cent, a development which has ignited calls on the monetary policy regulator to revise its forecast in tandem with the realities of time.
Professor Annim said the major driver of last month’s inflation was the transport sector which recorded an inflation rate of 27.6 percent.
This was followed by food inflation which recorded an inflation rate of 22.4 percent, up from 17.4 percent in February and largely due to the rise in food prices.
The rise in food prices has been largely attributed to the Russia/Ukraine conflict which has led to shortages of fertiliser and some food products.
The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, had earlier warned that Africa was more vulnerable to the negative economic impact of the Russia/Ukraine crisis, noting that the crisis would lead in increased food prices on the continent.
Unlike the services, industrial, maritime and aviation sectors which suffered massive declines in growth in the heat of the pandemic, this time, the hardest hit sector is agriculture.
This is because Russia and Ukraine account for a quarter of the world’s wheat exports, including at least 14 percent of corn exports in 2020 and a joint 58 percent of global sunflower oil exports in the same year.
Fertiliser, which is heavily used by farmers in Ghana and Africa, is imported from Ukraine and Russia.
Already in Ghana, for instance, the subsidies on fertilisers to the farmers have dropped drastically from 36 percent to only 15 percent.