Report by Ben LARYEA
The World Bank has revealed that the poor and vulnerable have been largely hit and are more
exposed to inflationary shocks as a result of high inflation and rising cost food prices impacting
negatively on purchasing power of Ghanaians.
According to the report, the poor devotes a larger share of their incomes to consumption than the
non-poor and are less likely to rely on income that is indexed to inflation than the rich.
It noted that inflation in Ghana have been mainly driven by high food and energy prices leading to
further increase in poverty and indicated that minimum wage in Ghana was increased by just 10%
when inflation between January 2022 and January 2023 was over 50%.
This disturbing revelation contained in the 7 th Ghana Economic update report by the World Bank
titled, “Price Surge Unravelling Inflation’s Toll on Poverty and Food Security”.
The report noted the macroeconomic crises particularly inflation which has hurt the poor should be
quickly addressed and suggested however that measures be put in place to beef up safety nets to
protect the most vulnerable.
High inflation rates in 2022, the bank disclosed led to worsened living conditions, increased poverty
and heightened food insecurity and was quick to suggest that government must hugely invest in
agriculture, climate-smart initiatives, infrastructure and income diversification to enhance resilience
and livelihoods and also roll out long term strategies that will focus on enabling farmers to adjust to
global demand and market opportunities.
It further recommended that smart responses should also be considered to enhance social protection
programmes to support vulnerable households as particular attention be focused on antipoverty
programs.
The report noted that inflation in 2022 led to catastrophic effects on food security and poverty and
likely to have pushed nearly 850,000 Ghanaians into poverty and worsened food insecurity due to
rising prices and again stated that rising inflation disproportionately affected the less well-off who
allocated a larger share of their budget to food.
On local food production, the report said it impacted heavily by the increased price of fertilizer and
explained that most of the fertilizers used in the country are imported as farmers are susceptible to
global fertilizer price fluctuations since fertilizer prices have been a challenge they encounter during
the planting season.
According to the report, higher fertilizer prices contributed to more expensive locally produced
goods which followed the trend of imported food stuffs, adding that the deprecated cedi also
contributed to inflation which affected prices of imported goods and services.
The World Bank Country Director for Ghana, Liberia, Sierra Leone, Africa Western and Central
Region, Pierre Laporte in a statement called for swift reforms in the agricultural space through the
rebuilding and restructuring of the financial sector’s capital buffers saying it will help address sector
challenges particularly in the energy sector.
He said the government must roll out initiatives to support farmers to be abreast with the emerging
trends to enable them to be at a competitive edge in the food value chain.
