Recent data from Numbeo has illuminated Ghana’s position within the intricate tapestry of Africa’s cost of living landscape, offering insights into both its regional standings and underlying economic dynamics.
Ranked 20th among 24 surveyed countries, Ghana emerges as one of the nations boasting a relatively lower cost of living across the continent. However, within the West African sphere, Ghana occupies the 3rd position, signaling nuanced variations in economic profiles within the region.
The Cost of Living Index, standing at 26.0 for Ghana, draws upon pivotal metrics including the Rent Index, Groceries Index, Restaurant Purchase Index, and Local Purchasing Power Index. Notably, Ghana’s Rent Index registers at 11.0, indicative of moderate housing expenses compared to other expenditure categories.
Further delving into the nuances, Ghana scores 18.8 in the Cost of Living Plus Rent Index, with the Groceries Index at 27.2 and the Restaurant Purchase Index at 22.9. The Local Purchasing Power Index stands at 14.8, offering a snapshot of Ghana’s purchasing power vis-à-vis its cost of living.
Côte d’Ivoire emerges as the pacesetter in both the African and West African contexts, boasting the highest cost of living with a commanding score of 44.7, closely trailed by Senegal at 44.0. The economic diversity across the continent is underscored by Ethiopia, Mozambique, and Mauritius, securing subsequent positions within the ranking.
Ghana’s placement within this ranking is attributed to mitigated inflation levels observed in 2023 and a moderated depreciation of the cedi, which collectively contribute to a relatively stable cost of living environment.
However, amidst these discernible trends, Ghana confronts a sobering inflation rate of 23.2% as of December 2023, with food inflation notably outpacing non-food inflation. The persistent depreciation of the Ghanaian cedi against the US dollar, marking a year-to-date decline of 15.57% in the retail market, poses formidable economic challenges.
Compounding these economic intricacies is Ghana’s adherence to an International Monetary Fund program aimed at bolstering revenue outlooks. The introduction of new fiscal measures, including tax reforms, underscores the government’s efforts to fortify fiscal resilience. However, such measures may inadvertently strain businesses and test investor confidence in the medium to long term.
The delicate balance between revenue enhancement and sustainable economic growth remains paramount, necessitating judicious policy-making and astute fiscal management. Against the backdrop of evolving economic realities, Ghana’s trajectory within the cost of living landscape underscores the imperatives of adaptability and resilience in navigating the complex dynamics of the global economy.