Ghana’s domestic market dominated inflation pressures in August 2025, with homegrown products accounting for 19 of the 20 biggest price drivers even as the West African nation maintains heavy reliance on imported cooking oils.
Ghana’s inflation rate fell to 11.5 percent in August from 12.1 percent in July, marking the eighth consecutive monthly decline and reaching levels not seen since October 2021. However, new data from the Ghana Statistical Service reveals that local products, not international commodity prices, continue to fuel the country’s cost-of-living pressures.
Vegetable oil stood as the sole imported food item among the top 20 inflation contributors, while locally produced staples commanded the list. Ginger prices surged more than 104 percent year-on-year, leading increases that also affected smoked herrings, yam, beef, cooked rice, river fish, and kenkey with fried fish. All recorded double-digit annual price jumps despite some monthly easing.
The dominance of domestic products in Ghana’s inflation basket contrasts sharply with the country’s substantial import dependencies. Ghana spent approximately 203 million US dollars on animal and vegetable fats and oils in 2023, with broader estimates suggesting total oil import costs could reach 11 billion Ghana cedis annually when combined domestic and imported volumes are factored.
Non-food sectors also contributed significantly to August’s price pressures. Cinema and cultural services, electricity, resold tap water, accommodation, and charcoal all featured among top drivers, demonstrating how rising costs extend beyond food markets into utilities, housing, and entertainment.
The data underscores a fundamental economic paradox facing Ghana. While vegetable oil imports drain hundreds of millions of dollars from foreign reserves annually, domestic supply chain disruptions and seasonal availability patterns drive most consumer price increases. This suggests that local production bottlenecks and distribution challenges matter more for immediate inflation than global commodity market volatility.
River fish and other locally sourced proteins appearing prominently in the inflation rankings highlight ongoing pressures on traditional food systems. These increases affect millions of Ghanaians who depend on local markets for daily nutrition, even as the country allocates substantial foreign currency to import cooking oils that barely register in monthly price movements.
The trend reflects broader challenges in Ghana’s economic structure, where import-dependent sectors create foreign exchange pressures while domestic supply constraints drive consumer price increases. Despite vegetable oil’s modest contribution to August inflation, its massive import costs continue straining Ghana’s trade balance and household budgets through exchange rate effects.
Ghana’s sustained inflation decline from 23.8 percent in December 2024 demonstrates progress in economic stabilization efforts. However, the persistence of local products among top price drivers suggests that addressing supply-side constraints in domestic agriculture and distribution networks remains crucial for long-term price stability.
The August data confirms that Ghana’s inflation battle is largely fought at home, shaped by local supply dynamics, seasonal food patterns, and service sector costs, even as import bills for essential commodities continue mounting external economic pressures.
Source: newsghana.com.gh
