By Darryl Pietersen, Director of Anglophone Africa, WorldRemit
ACCRA, Ghana, 7 February, 2023,-/African Media Company (AMA)/- Inflation charges in Ghana are at a document excessive, however what’s inflicting the rise, and the way does it have an effect on you? Ghana’s inflation fee at the moment stands at over 40%. Predictions counsel that inflation in Ghana will peak within the first quarter of 2023, following one other hunch within the Ghana Cedi in November 2022.
Right here, we’re trying on the causes of inflation in Ghana from August 2022 to as we speak. Learn on to see how that inflation impacts the change fee for Ghanaian foreign money, why the Ghana Cedi is depreciating, and what which means on your cash transfers to Ghana.
What’s inflicting inflation in Ghana?
At the moment, the inflation rate in Ghana continues to rise although analysts predict that it’ll decelerate in 2023. The inflation fee in Ghana is affected by many components, and there are various factors concerned in how inflation is calculated.
Firstly, the heightened political division in Ghana between the ruling New Patriotic Occasion and their opposers has resulted in an opposition request for the removing of the present Finance Minister, Ken Ofori-Atta, on account of his dealing with of the present monetary state of affairs. Political instabilities, conditions, and dangers can have an unlimited affect on inflation charges, as they may have an effect on how a lot a authorities will have the ability to borrow in occasions of want. Over the course of the final yr, Ghana has borrowed cash in makes an attempt to stabilise inflation, so there may be additionally the doable threat of additional debt, which is able to affect political conversations.
Additional, costs for commodities are a number one indication of inflation dangers, and are sometimes utilized in predicting inflation or deflation, although excessive international commodity costs also can add to excessive inflation ranges.
Costs of crude oil surged globally after Russia’s invasion of Ukraine in early 2022, however oil is one in all Ghana’s highest sources of export income, and oil costs in Ghana are driving inflation, inflicting rising power prices. Ghana’s present inflation charges are partly a results of international oil value will increase inflicting home will increase at fuel stations, in addition to typically in transportation prices, with a knock on to different components reminiscent of meals provide chains.
Although meals is mostly excluded from ‘core’ inflation measures, the rising costs for meals was the preliminary explanation for the inflation fee in Ghana, created by panic-buying because the nation entered lockdowns on account of Covid-19 in 2020. Regardless of making some restoration, inflation in Ghana soared once more in mid-2021, after the meals provide chain bumped into problems with oil pricing, a hen flu outbreak in one in all Ghana’s food-producing areas, and local weather change inflicting delayed rainfall. The rise in meals prices affected Ghana’s inflation charges as particular components turned more durable to supply, and subsequently extra expensive.
In the present day, Ghana’s foreign money, the Cedi, is depreciating towards the US greenback, and is now one of many worst performing international currencies. This is among the foremost components of the inflation fee in Ghana. A weakened foreign money signifies that hikes in import prices have to be handed on to people throughout the nation, including strain to already-higher prices of meals and transportation.
How this impacts Ghana Cedi’s inflation fee
Inflation and currency exchange rates are very carefully associated, and adjustments in a single have an effect on the opposite. Within the final yr, the Ghana Cedi has misplaced greater than half of its worth towards the US greenback. As imported commodities are priced in US {dollars}, when inflation rises, the identical quantity of Ghana Cedi buys lower than it did earlier than, inflicting foreign money depreciation in Ghana of the Cedi towards USD. Exchange rates are sometimes decided by a perceived desirability of a specific foreign money, so a lower in that foreign money’s buying energy results in a lower in desirability, additional decreasing the change fee.
Sending cash to Ghana with WorldRemit
WorldRemit desires to ensure you get essentially the most on your cash, even by way of robust occasions. Although the depreciation of the Ghana Cedi has impacted cash transfers to Ghana, WorldRemit at all times tries to supply the closest change charges to the market. In comparison with different cash switch corporations, WorldRemit locations itself as essentially the most aggressive by way of change charges and Google Alternate Charges. To examine actual time change charges for cash transfers with WorldRemit, use our calculator.
With WorldRemit, it’s straightforward to send Cedi to friends and family in Ghana as cellular cash, financial institution switch, airtime high up, or for money pickup. When you’re registered with WorldRemit, and we’ve verified your info, you may ship cash to household and buddies by way of our web site, or on our iOs or Android app. You’ll pay no charges in your first three transfers with our 3FREE supply, and 90% of cash transfers to Ghana are prepared inside minutes.
Disclaimer: The contents of this weblog put up doesn’t represent authorized or monetary recommendation and is supplied for normal info functions solely. Should you require particular authorized and / or monetary recommendation you need to contact a specialist lawyer or monetary advisor. Data true at time of publishing.
Distributed by African Media Agency (AMA) on behalf of WorldRemit.
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