The marginal decline, attributed partly to a more stable cedi, signals tentative progress in the country’s battle against soaring prices.

Government Statistician Samuel Kobina Annim noted that while food inflation remains elevated at 28.1%, non-food inflation saw a sharper decline, falling to 18.8% from 19.2% in January. Month-on-month figures also showed improvement, with food inflation dropping to 1.8% and non-food inflation easing to 0.9%.

The cedi’s relative stability in recent months has helped curb import costs, a key driver of inflation in the import-dependent economy. However, inflation remains well above the Bank of Ghana’s target range of 6% to 10%, prompting the central bank to maintain its benchmark interest rate at 27% to balance price control with economic growth.

Efforts to stabilize the economy have included a 45% hike in cocoa farmgate prices in September 2024, aimed at boosting farmer incomes and reducing smuggling. While these measures have shown some success, challenges persist in key sectors like cocoa and gold, which are critical to Ghana’s export earnings.

Looking ahead, the Economist Intelligence Unit forecasts the cedi will end 2025 at GH¢17.23 to the US dollar, a slight depreciation reflecting ongoing economic pressures. Improved investor confidence, higher gold export revenues, and the conclusion of debt restructuring talks are expected to bolster foreign reserves and support the currency.

In January 2025, Parliament approved a provisional budget of GHȼ68.1 billion (US$4.65 billion) to fund government operations until March, averting a potential shutdown. The budget includes critical allocations for energy sector payments, addressing long-standing arrears that have strained the economy.

While the recent dip in inflation and cedi stability offer cautious optimism, analysts warn that sustained recovery will require deeper structural reforms. Policymakers remain focused on stabilizing the economy, but with inflation still in double digits, the road to full recovery appears long and uncertain.