-Inflation Rises for Second Consecutive Month as Cedi Records Steepest Depreciation Among African Currencies
-Middle East Conflict Escalation Fuels Price and Currency Pressures
By Prince Ahenkorah
Ghana’s economy is facing fresh price and currency pressures as inflation rose for the second consecutive month in September, while the cedi recorded the steepest depreciation among selected African currencies monitored by the World Bank.
The year-on-year inflation rate increased to 5.2% in September 2026, up from 5.0% in August, according to the Ghana Statistical Service.
Although the latest figure remains significantly lower than the 9.4% recorded in September 2025, the increase signals a reversal in the downward inflation trend recorded earlier this year.
Inflation has risen from 4.6% in July to 5.0% in August and now 5.2% in September, after reaching a low of 3.2% in March.
The Numbers
Presenting the figures, the Government Statistician said the latest increase reflected a reversal of the price decline recorded in August.
Month-on-month inflation stood at 1.1% in September, following a 1% decline in prices in August.
The Statistician noted that while inflation had nearly halved over the past year, the direction of price movements over the past two months remained upward.
Food inflation increased to 4% in September from 3% in August, although it remained well below the 11% recorded a year earlier.
On a month-on-month basis, food prices increased by 1.5% in September after falling by 2.6% in August.
The Ghana Statistical Service said food accounted for approximately 37% of overall inflation during the month.
The increase in food inflation comes as households face renewed pressure from rising prices of food items, despite the substantial moderation in annual food inflation compared with a year earlier.
Non-food inflation eased from 6.8% in August to 6.2% in September and was also lower than the 8.2% recorded in September 2025.
Despite the decline, non-food items remained the largest contributor to the overall inflation rate, accounting for approximately 63% of inflation in September.
Non-food prices increased by 0.6% month-on-month in September, compared with 0.5% in August.
Goods vs Services
The data also showed a widening gap between goods and services inflation.
Goods inflation increased to 4.2% in September from 3.8% in August, but remained significantly below the 11.2% recorded a year earlier.
Services inflation, however, eased marginally from 8.6% to 8.3%, but remained substantially higher than the 4.8% recorded in September 2025.
The figures indicate that services are now recording inflation at almost twice the rate of goods.
On a month-on-month basis, services prices rose by 0.8% in September, compared with 0.4% in August.
Sectoral Pressures
Among the 13 divisions of expenditure, housing, water, electricity, gas and other fuels recorded the highest inflation rate at 10.3%.
Although the figure declined from 11.6% in August, the division remained a major source of price pressure, contributing approximately 26% to overall inflation.
Restaurants and hotels recorded inflation of 9.2%, while transport inflation stood at 7%.
Cedi Depreciation
Adding to the economic pressure, the Ghana cedi recorded the steepest maximum depreciation among the African currencies monitored by the World Bank during the second quarter of 2026.
According to the World Bank’s October 2026 Africa Economic Update, the cedi weakened by nearly 10% between March and June, recording the largest maximum weakening among the currencies tracked.
It was followed by the currencies of Lesotho, Namibia, South Africa and Eswatini, which each recorded maximum weakening of approximately 7%.
The Seychelles rupee also came under significant pressure, while the currencies of the Democratic Republic of Congo and Uganda recorded maximum declines of about 6% and 5%, respectively.
The World Bank said currency depreciation was widespread across the region, with seven of the 22 countries monitored, excluding the CFA franc zone, recording maximum depreciation of more than 5%.
Ghana was among the countries experiencing the sharpest pressure.
Middle East Conflict Blamed
The World Bank attributed the pressure on African currencies partly to a sharp increase in oil and energy prices following the escalation of the conflict in the Middle East.
Higher energy prices increased import bills, particularly for countries that depend heavily on imported energy.
This, in turn, increased demand for US dollars, weakened foreign exchange positions and intensified depreciation pressures.
The report also pointed to heightened geopolitical uncertainty, which triggered a flight to safer assets in global financial markets and encouraged capital to move away from emerging and frontier economies.
For countries with significant external debt obligations, currency depreciation also increases the local-currency cost of servicing dollar-denominated debt, adding further pressure to government finances.
Partial Recovery
Despite recording the largest maximum weakening between March and June, the cedi recovered some of its losses by August.
The World Bank noted that the currency remained weaker than its end-February level by the end of August, although the depreciation had eased considerably from its peak.
By the end of August, only 10 African currencies remained weaker than their end-February levels, suggesting that much of the pressure on regional currencies had subsided.
Uneven Impact
The impact of the shock, however, was not uniform across Sub-Saharan Africa.
Countries heavily dependent on energy imports, with limited foreign exchange buffers and high debt-service burdens, faced stronger pressures.
Commodity-exporting economies proved more resilient. South Africa benefited from stronger demand for gold and platinum, while oil exporters such as Angola and Nigeria gained from higher crude oil prices and increased export earnings.