Ghana’s annual inflation rate fell to an almost three-decade low in January 2026, bringing it closer to African peers such as South Africa and Tanzania within the low single-digit range—around three percent—and strengthening the case for further interest-rate cuts by the central bank.
Data released on Wednesday by the Ghana Statistical Service showed inflation eased for a 13th consecutive month to 3.8 percent, down from 5.4 percent in December—the lowest level since August 1999, according to Trading Economics.
The global data tracker noted that inflation in the West African nation has historically averaged 17.2 percent between 1998 and 2026, reaching a peak of 63.1 percent in March 2001 and a record low of 0.4 percent in May 1999.
The latest decline was driven primarily by easing food prices, with food inflation slowing to 3.9 percent, Government Statistician Alhassan Iddrisu said at a press briefing on the data.
Although Ghana rebased its Consumer Price Index in 2021, the January reading still represents the lowest inflation level since that rebasing and extends a sharp disinflation trend from the 54.1 percent peak recorded in December 2022 during the country’s economic crisis.
Africa’s largest gold producer has benefited from an improved fiscal outlook and record-high gold prices, which helped the cedi appreciate by about 40 percent against the US dollar over the past 12 months, significantly easing price pressures. The currency also posted its first annual gain in decades, supported by stronger reserves, elevated gold prices, and broad dollar weakness.
Rate-cut expectations strengthen
The rapid slowdown in inflation—alongside the central bank’s projection that price growth will remain within its 6–10 percent target band in 2026—may prompt policymakers to lower borrowing costs again when they next meet in March.
At its first Monetary Policy Committee meeting of the year, the Bank of Ghana cut the benchmark policy rate by 250 basis points to 15.5 percent, the lowest level since February 2022 and below most economists’ expectations, extending one of the continent’s most aggressive easing cycles.
The policy rate had already been reduced by 1,000 basis points, from 27 percent to 18 percent, between January and November last year. Policymakers said tight prior monetary policy, fiscal consolidation, and a significant build-up in foreign reserves had strengthened underlying macroeconomic conditions sufficiently to justify further easing.
Weak business activity clouds recovery
Despite easing inflation, the country recorded the weakest private sector performance among eight major African economies at the start of this year, with business activity falling to a 12-month low and trailing South Africa, according to the latest Purchasing Managers’ Index survey released by S&P Global.
The PMI declined to 48.5 in January from 51.1 in December, marking the first contraction in four months and signalling a modest deterioration in operating conditions.
“Companies in Ghana experienced a slow start to the year, as signalled by renewed falls in both new orders and business activity in January,” the report said. “On a more positive note, confidence for the coming year improved to a six-month high, and employment continued to rise.”
