Ghana Battles Economic Crisis, Inflation Climbs Over 50%

The packing machine at Nakobs’ Pac factory in the outskirts of Ghana’s capital Accra is running at full pace, churning out sachets of treated drinking water.

But all is not well at Nakobs’. Like other small businesses in Ghana these days, owner Daniel Tekyi is struggling.

With inflation at over 50.3 percent in November from 40.4 percent in October — the highest rate since 2004, the currency worth half what it was last year, fuel prices doubling and debt payments gobbling up more than half the government’s revenues, Ghana is battling its worst economic crisis in decades.

Ghana signed a $3 billion bailout deal with the International Monetary Fund on Tuesday in a bid to shore up public finances, but economic stability is still a way off.

“It would be better for us to close the factory,” said Tekyi. “We really don’t know when this crisis is going to end.”

Once applauded as a rock of economic stability and security in a region plagued by coups and jihadist wars, Ghana has steadily lost investor confidence.

Like much of the continent, Ghana slowly emerged from the pandemic only to face the fallout of the war in Ukraine and the surge in fuel and food costs.

Facing a crunch in payments, President Nana Akufo-Addo this year reversed course from his “Ghana Beyond Aid” concept and entered talks with the IMF for a bailout.

Already, the government has announced a 2.5 percent increase in VAT and a freeze on public worker hires to help cut costs and hike revenues. A debt restructuring is underway.

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