Food inflation Ghana’s biggest problem at the moment – Prof Bokpin
Food inflation, as highlighted by Professor Bokpin during the Graphic Business Twitter Dialogue Series on the 2023 Mid-Year Budget Review, is the country’s biggest challenge at the moment.
The severity of the situation is underscored by household expenditure data, which reveals that more than 42% of disposable income is devoted to food expenses.
With food inflation at alarming levels, the impact on Ghanaian households is profound, exacerbating economic hardships and leading to a rise in multi-dimensional poverty.
According to Professor Bokpin, over 7 million Ghanaians currently find themselves grappling with multi-dimensional poverty, highlighting the urgency of addressing the issue.
“The biggest problem right now in Ghana is food inflation, and then if you look at household expenditure disaggregation we spend more than 42% of our disposable income on food. So once food inflation is very high, the impact is very strong on Ghanaians. And I’m sure if you look at the report from the World Bank, in terms of the number of people who have fallen into poverty, as we speak right now more than 7 million Ghanaians are multi-dimensionally poor,” he quipped.
Inflation, according to a recent World Bank report, pushed nearly 850,000 Ghanaians into poverty at the end of the 2022 year.
Additionally, high inflation significantly worsened food insecurity in the country with a quarter of the population deemed to be food insecure at end-2022.
Per the World Bank report, food insecurity which is currently at a crisis and emergency level, is expected to remain elevated through mid-2023.
According to available data from the Ghana Statistical Service (GSS), 23% and 44% of Ghana’s population are consumption and multi-dimensionally poor.
Food prices at the end of 2022 had increased by more than 140% in Sub-Saharan Africa. In Ghana, food inflation for June 2023 exceeded the national average (42.5%) standing at 54.2%.
Despite the Finance Minister’s claim of a turnaround and economic recovery, Professor Bokpin remains skeptical, contending that any genuine recovery must confront and resolve challenges such as food inflation, income inequality, and widespread poverty, adding that the need to uplift millions of Ghanaians out of poverty is paramount to ensuring sustainable and inclusive growth.
Given the country’s constrained fiscal resources, Professor Bokpin proposes strategic investments in critical sectors, notably agriculture, which holds immense potential to generate higher employment, income, and output multiplier effects. Such a focus on agricultural development could be a key driver in revitalizing the economy swiftly.
