Inflation pushes 850,000 Ghanaians into poverty – World Bank report
Inflation, according to a new 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.
According to available data from the Ghana Statistical Service (GSS), 23% and 44% of Ghana’s population are consumption and multi-dimensionally poor.
The report titled “Price Surge: Unraveling Inflation’s Toll on Poverty and Food Security”, notes that high inflation had catastrophic effects on poverty and food security significantly impacting the poor.
According to the report, 20% of poor households devoted a higher share of their budget to food and hence were more impacted by inflation which was driven primarily by high food prices as food inflation outpaced non-food inflation.
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%, last month’s food inflation was 51.8%.
Non-food inflation was 33.4% with last month’s non-food inflation being 34.6%.
Per the World Bank report, food insecurity which is currently at a crisis and emergency level, is expected to remain elevated through mid-2023.
“In the longer term, to mitigate the impact of inflation on food security, policymakers must enable farmers to adjust to global demand and take advantage of market opportunities,” said Ashwini Sebastian, Senior Agricultural Economist at the World Bank.
“This is particularly relevant since many of the poor are farming households. Policies should therefore be evidenced based and aimed at alleviating the different constraints farmers face,” he added.
Medium-to-long term policy actions that should be taken to tackle the issue of rising food prices and food insecurity the World Bank notes, should include the channeling of investments in agriculture research and technology transfers to help increase productivity and reduce production costs, as well as improve the quality and safety of food.
In addition to supporting higher domestic food production, policies need to target opening the country to more effective integration with global food supply chains.
These policies, the report notes, should seek to foster regional and global trade to improve the availability and affordability of food by reducing barriers to trade, promoting regional integration and increasing market transparency.
