Economic and environmental policy analyst Michael Adofo Abuah has urged the government to address the rising cost of essential goods and services as it prepares to roll out its New Economy agenda in the 2027 Budget.
He warned that persistent supply-side pressures, particularly in the energy and transport sectors, could undermine efforts to create jobs, increase incomes and stimulate economic growth.
Speaking on JoyNews Desk on Tuesday, ahead of the presentation of the 2027 Budget by Finance Minister Dr Cassiel Ato Forson on Thursday, November 12, Mr Abuah said the government must pay closer attention to the prices affecting ordinary Ghanaians.
“I think the Finance Minister in the ministry should pay attention to the prices affecting the ordinary person. The data shows that the supply shocks are enormous and the rates are high, especially with the environmental effects of El Niño coming in and how they are going to impact energy prices,” he said.
Transport and housing costs remain high
Data from the Ghana Statistical Service show that inflation rose to 5.5 per cent in October, marking its third consecutive monthly increase.
Although the rate remains below the Bank of Ghana’s medium-term target of 8 per cent, plus or minus two percentage points, some essential expenditure categories continue to record relatively high inflation.
Transport inflation, for instance, increased to 14.1 per cent in October, from 5.7 per cent in September, while inflation for housing, water, electricity, gas and other fuels stood at 10.5 per cent.
Mr Abuah said the pressures in these sectors required targeted interventions, particularly in view of potential climate-related disruptions.
He referred to recommendations in International Monetary Fund (IMF) reports, particularly those relating to the Policy Coordination Instrument (PCI), which he said highlighted the need to address inflationary pressures in essential services.
He noted that inflation in some of these categories remained higher than the overall headline rate.
“So, more jobs, higher incomes, and strategic investment in growth areas of export sectors, basically,” he added.
Analyst calls for caution in policy rate adjustments
Mr Abuah also urged caution in adjusting the policy rate, arguing that monetary policy decisions should take into account the need to support investment and broader economic activity.
“The advice is that we should look at our investments and the central banks be conservative in how we adjust the policy rate,” he said.
His comments come as the government prepares to implement its New Economy agenda, with economic growth, investment and employment expected to feature prominently in the 2027 Budget.
He said the success of the agenda would depend not only on headline economic indicators but also on whether businesses could operate at lower costs and households experienced meaningful improvements in their living conditions.
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