Tariffs are increasing. Production costs are climbing. But wages? They’ve barely moved. That’s the grim picture facing Ghanaian households and businesses, according to economist Professor Patrick Asuming.
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Speaking on PM Express Business Edition on June 19, Prof. Asuming warned that despite improved macroeconomic numbers, the real economy tells a different story. “We still need to understand that prices are rising,” he said.
“Yes, inflation has slowed from 18% to around 10%, but prices aren’t falling. Things are just getting more expensive at a slower pace.”
He clarified that a drop in the Producer Price Index (PPI) only means the rate of price increases is slowing, not that prices are going down. “We shouldn’t expect inflation dropping to mean cheaper prices,” he cautioned.
A key factor driving continued price pressure is the rise in utility tariffs and production inputs. “Tariffs keep going up, and that significantly adds to the cost,” he explained. “Wages haven’t improved, and production is getting more expensive.”
Businesses Are Squeezed
Prof. Asuming noted that businesses are facing rising costs on all sides. These costs eventually trickle down to consumers, worsening their financial burden.
Although the cedi has strengthened and some financial indicators are positive, the benefits aren’t being felt across the wider economy. “It looks like the financial and monetary side is performing better, but the real economy is lagging,” he said.
He acknowledged the government’s efforts to stabilize the financial sector. Improvements in Treasury bill rates, foreign reserves, and favorable global commodity prices have all helped. “But that doesn’t mean the broader economy is healthy,” he emphasized.
GDP Growth Isn’t Uniform
Addressing Ghana’s first-quarter GDP figures, Prof. Asuming agreed they beat expectations, but with caveats. The economy has 20 sub-sectors. Five of them shrank,” he revealed. “It’s the bigger sectors that grew and pushed up the overall figure. But it’s not a uniform recovery.”
That mismatch, he argued, explains why the public feels little improvement. “There’s a real disconnect between macro numbers and what people experience daily. The data says one thing, but their pockets say another.”
The Bottom Line
Prof. Asuming’s message was blunt: until tariffs stabilize, costs ease, and wages improve, most Ghanaians won’t feel any real recovery, regardless of what the economic data shows.
