Professional services firm Deloitte has cautioned that rising inflation in Ghana and Nigeria will pose significant challenges to economic growth, as businesses grapple with higher costs and consumers tighten their spending.
The firm’s analysis highlights how persistent inflationary pressures are straining both economies, with the potential to hinder recovery efforts. Deloitte predicts that Nigeria is likely to continue its current monetary policy approach, while the Bank of Ghana may maintain its stance, leaving room for a possible interest rate hike if inflationary trends persist.
In Ghana, food prices have been a major driver of inflation, which reached 23.8% in December 2024—marking the fourth consecutive monthly increase. Meanwhile, Nigeria’s headline inflation climbed to 34.80%, fueled by festive-season spending and ongoing economic pressures.
In an inflation update, Deloitte West Africa observed that several factors, including food price volatility, exchange rate instability, and global commodity price trends, will likely keep inflationary pressures elevated into 2025.
“The underlying inflation pressures, driven by food price volatility, exchange rate fluctuations, and global commodity prices, are expected to persist in 2025,” the report noted.
The Economist Intelligence Unit (EIU) also weighed in, forecasting average inflation rates of 27.7% for Nigeria and 15.5% for Ghana in 2025. However, the EIU expects inflation to ease across much of Africa compared to the elevated levels seen in 2023, with a few exceptions.
“Inflationary pressures are expected to ease from the more elevated levels recorded in 2023 for all but a small handful of African countries—namely Angola, Seychelles, Sudan, and Tanzania, where country-specific factors will push up consumer price inflation,” the EIU stated.
The ongoing inflationary trends underscore the need for strategic economic measures in both Ghana and Nigeria to stabilize prices and support growth amid mounting challenges.
SOURCE: Joy Business
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