Market Women Applaud BoG as Food Prices Ease Following Sharp Inflation Decline
Market women across Ghana have lauded the Bank of Ghana for its efforts in bringing down headline inflation, noting that the decline has significantly reduced the cost of foodstuffs purchased from farmers for resale.
Traders said lower prices have boosted sales compared to last year. “Last year was really tough. I would buy a box of tomatoes for GHS 2,800, but I often struggled to sell them at a profit. This year, I bought the same box at GHS 2,500 and was able to sell all, making some meaningful profit,” said one tomato seller.
An onion trader echoed the same sentiment, commending the Central Bank for reigning in inflation. She urged the Bank to maintain the low inflation rate, which she said ensures affordable prices and benefits ordinary Ghanaians.
Ghana began 2025 with an annual inflation rate of 23.5 percent in January, slightly down from December 2024’s 23.8 percent. Food prices contributed significantly to inflation, while non-food inflation showed a steady decline throughout the year.
By December 2025, headline inflation had eased to 5.4 percent year-on-year (fairly below the Central Bank’s medium target band of 8+/-2%), marking the 12th consecutive month of disinflation and representing an 18.4 percentage point drop from 23.8 percent a year earlier.
Annual food inflation fell sharply to 4.9 percent in December, down from 6.6 percent in November and 27.8 percent in December 2024, a decline of 22.9 percentage points over the year.
“This is significant given that food accounts for roughly 43 percent of household expenditure. Lower food inflation provides immediate relief to household budgets,” said Government Statistician Dr. Alhassan Iddrisu.
He, however, noted that food prices still rose by 1.1 percent month-on-month in December, suggesting that while longer-term pressures have eased, short-term fluctuations largely due to seasonal factors still persist.
Analysis of sub-categories revealed declines in prices of vegetables, cereals, fish, and meat. While monthly price movements reflected seasonal trends, most food groups recorded modest increases or outright declines by year-end.
The drop in headline inflation has been supported by the Bank of Ghana’s aggressive policy rate cuts in 2025, which reduced the prime rate by 1,000 basis points (10%) from 28 percent to 18 percent by December.
The cuts were implemented in three phases: 300 basis points in July, 350 basis points in September, and another 350 basis points in November, spurred by subdued inflation and an improved economic outlook.
