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Inflation is Falling, But the Relief isn’t Uniform

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Inflation is Falling, But the Relief isn’t Uniform

Ghana’s headline inflation has dropped sharply to 9.4% as of September 2025. From 23.5% in January to single digits by September, this steep decline reflects a remarkable disinflationary turnaround, driven by tighter monetary policy, exchange-rate stability, and a slowdown in food prices. At first glance, this looks like a clear victory for economic management.

Yet beneath this national success lies a more uneven reality. The headline figure tells only half the story. While the average Ghanaian is expected to be better off, many regions continue to battle stubbornly high inflation. In September 2025[1], the North East Region recorded an inflation rate of 20.1%, while Bono East stood at just 1.2%. This means households in the Northeast are seeing their cost-of-living rise over 16 times faster than those in Bono East.

Even earlier in the year, when the national inflation rate had begun its steepest descent, the Upper West Region was still recording painfully high prices of 38.1% in May, at a time when the national average had already fallen to 18.4%[2]. This stark contrast underscores how disinflation has not been evenly felt across the country.

These disparities reveal a deeper structural challenge: inflation in Ghana is increasingly regionalized, not uniform. The same national policies that have stabilized prices in Accra or Kumasi have had much weaker effects in the northern and inland regions, places where food inflation, logistics costs, and supply bottlenecks dominate local price dynamics.

For millions of households, especially in the Upper East, Upper West, and Savanna Regions, the macroeconomic victory feels distant. Inflation may be falling on paper, but purchasing power remains severely eroded. These regional variations are not random. They stem from long-standing structural weaknesses:

Poor Infrastructure and High Transport Costs: Bad roads and longer supply routes mean goods take more time and fuel to reach northern and rural markets.

Weak Supply Chains and Market Access: Regions with fewer storage facilities and market linkages are more exposed to seasonal price spikes.

Food Dependence and Climate Sensitivity: Areas dependent on staple crops are more vulnerable to inflation when harvests fail or logistics break down.

Source: Data – Price Indices: Consumer Price Index Bulletin, GSS

Graph – IMANI CPE

The National Average (blue line) shows an almost uninterrupted success story, dropping from 23.5% to 9.4% in nine months. The Regional Gap (red line) shows an inconsistent, volatile reality, ending September at a wider gap (18.9 ppt) than it started (17.2 ppt).  The period from May to June marks the moment the national success story collided with ordinary citizens’ reality. While the National Average recorded its steepest decline from 21.2% in April to 13.7% in June, the Regional Gap soared, peaking at 23.9 points (a 6-point jump from March). In other words, just as the economy was celebrating its fastest improvement, the disparity in the cost of living between the best- and worst-off regions was at its highest.

The graph captures the dual story of 2025. While national inflation declined dramatically, the regional gap remained wide and volatile, peaking at 23.9 percentage points in June. Even as prices stabilized nationwide, the inequality in inflation outcomes persisted. This means that Ghana’s “disinflation success” has not been a shared success. The overall average has improved, but the experience of inflation remains vastly different across the country.

True price stability is not measured by how low the national figure goes, but by how evenly relief is distributed. Ghana’s disinflation has been real but uneven. The widening gap between regions is a reminder that macroeconomic stability must be paired with structural and logistical reforms that lower costs for everyone, not just urban consumers.

Going forward, policy must focus not only on sustaining low inflation but on compressing the regional inflation gap, ensuring that no region remains trapped in a cycle of high prices while the rest of the country moves on.

 

Credit- IMANI’s Criticality Analysis of Governance and Economic Issues September 29 – October 4, 2025

Tags: But the Relief isn’t UniformIMANIinflationInflation is Falling

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