As Mahama’s Inflation Miracle Continues
By Prince Ahenkorah
Latest inflation data has delivered a potent political victory for the governing administration, with headline inflation plunging to a historic low of 3.8% in January 2026 a level not seen since 1999.
This sharp decline from 23.5% just a year ago signals a dramatic recovery from the severe macroeconomic crisis that characterised the nation’s recent past and provides a favourable backdrop for the upcoming electoral cycle.
The data, released by the Ghana Statistical Service, reveals a broad-based price deceleration, with both food inflation (3.9%) and non-food inflation (3.9%) converging at levels considered firmly within target.
The 13th consecutive monthly decline follows a major policy pivot, most notably a substantial 250-basis-point reduction in the central bank’s policy rate to 15.5% in January, aimed at stimulating credit and economic activity.
Behind the headline triumph, however, lies a tale of two Ghana. Stark regional disparities persist, exposing the uneven benefits of macroeconomic stabilisation.
While the Savannah Region experienced outright deflation at -2.6%, the North East Region recorded an inflation rate of 11.2%.
This chasm underscores the uneven transmission of monetary policy and deep-seated structural challenges in agricultural supply chains and local market integration, which continue to impose a severe cost-of-living burden on the most vulnerable.
Analysts note that the achievement of single-digit inflation vindicates the government’s aggressive fiscal consolidation under its International Monetary Fund programme and the central bank’s tight monetary stance over the preceding 24 months.
The steep disinflation trajectory strengthens the hand of doves on the Monetary Policy Committee (MPC), who are likely to advocate for further measured rate cuts to support growth.
“The Bank of Ghana now has significant room to manoeuvre,” commented a senior economist at a leading Accra-based investment firm. “The focus will shift from fighting inflation to managing the exchange rate and nurturing a fragile recovery.”
Yet, underlying fragility remains. Policymakers are acutely aware that this hard-won stability is precarious. It is contingent on continued fiscal discipline, stable global oil prices, and a managed cedi.
Any significant fiscal slippage in an election year or a new external shock could swiftly unravel the gains. For the opposition, the regional inflation gap provides a critical line of attack, arguing that headline stability has yet to translate into tangible relief for millions.
The historic 3.8% figure is a powerful symbol of economic normalisation, offering a boost to business confidence and consumer sentiment.
However, its true test will be its sustainability beyond the statistics, measured in consistent purchasing power for ordinary Ghanaians and balanced growth across all regions. The government will celebrate the number, but its opponents will focus on the map.