Ghana must prioritise job creation and higher household incomes to make the country’s economic recovery meaningful to ordinary citizens, Head of the Economic Division at the Institute of Statistical, Social and Economic Research (ISSER), Professor Fred Dzanku, has said.
He argued that although the country had made significant progress in reducing inflation, many households continued to struggle financially because the slowdown in price increases had not translated into cheaper goods and services.
Professor Dzanku said improving purchasing power required measures that enabled households to earn more and afford essential commodities, rather than relying solely on lower inflation as an indicator of economic recovery.
Speaking on the sidelines of the launch of ISSER’s State of the Ghanaian Economy Report 2025, he said the decline in inflation was an important achievement but had not fully addressed the financial difficulties facing consumers.
“What we need to do really is to see how do we increase the incomes of households,” he said.
Ghana’s year-on-year inflation rate rose slightly to 5.2 per cent in September 2026 from 5.0 per cent in August, following a substantial decline in inflation during 2025.
However, Professor Dzanku said the pace of price increases did not adequately reflect the cost-of-living pressures experienced by households, particularly when their incomes failed to keep up with rising prices.
He explained that lower inflation meant prices were increasing more slowly, not necessarily that commodities were becoming cheaper.
Using rice as an example, he said a bag that cost GH¢500 two years earlier would not automatically return to that price because inflation had declined. Instead, its price could increase more slowly to GH¢510 or GH¢520.
“So the price has not fallen, and that’s what households are concerned about. They are concerned about how much of the commodity they are able to purchase,” he said.
The economist noted that households could continue to lose purchasing power even when inflation remained relatively low if their earnings did not rise sufficiently to match price increases.
“If incomes are not increasing even at the rate at which prices are increasing, then even if the rate of increase in price is slower, households are still worse off,” he said.
Professor Dzanku also observed that Ghana’s inflation remained higher than that of a typical sub-Saharan African country in some comparisons, despite the considerable progress made in bringing domestic inflation down.
“Even though we’ve done well in bringing down inflation considerably, still when you compare us with a typical sub-Saharan African country, our inflation rates are still higher, by sometimes about two percentage points,” he said.
He cautioned against assuming that lower prices alone would resolve the cost-of-living challenge, noting that falling prices could also affect the earnings of producers.
Instead, he called for policies that would expand employment opportunities and improve household earnings, enabling consumers to meet their needs more comfortably.
His comments highlight the need to complement efforts to stabilise prices with measures that strengthen incomes and purchasing power, ensuring that improvements in Ghana’s economic indicators translate into better living conditions for households.
