Dr. Ernest Addison, Governor of the Bank of Ghana (BoG), has explained why food prices increased last year.
Dr. Ernest Addison, explained that the rise in food prices last year was mainly caused by dry weather conditions in farming areas early in 2024, which resulted in poor crop yields. Speaking at the 122nd Monetary Policy Committee (MPC) press conference on January 27, 2025, Dr. Addison noted that price trends in 2024 showed a slowdown in the disinflation process, primarily due to food price pressures. Inflation increased from 23.2% in December 2023 to 25.8% in March 2024, before gradually declining to 20.4% in August. However, by December 2024, inflation rose again to 23.8%, mainly due to food price hikes.
The rise in food prices was largely linked to the dry weather earlier in the year, which negatively impacted harvests. Meanwhile, non-food inflation steadily decreased, reaching 20.3% by the end of the year. The severe drought put Ghana’s agricultural sector at risk, threatening the livelihoods of over 928,000 farmers and jeopardizing the nation’s food security.
In response to the severe drought, the previous Akufo-Addo government implemented an emergency relief package to mitigate the crisis. This included a temporary ban on grain exports, cash transfers to affected farmers, and a large-scale grain import initiative to prevent a potential disaster. The dry conditions affected key agricultural regions across Ghana, with nearly half of the country’s 1.8 million hectares of farmland suffering damage.
The Ministry of Food and Agriculture estimated a loss of GHC3.5 billion in farmer investments, with potential revenue losses totaling GHC10.4 billion. To reduce further harm, the government imposed a temporary ban on the export of grains such as maize, rice, and soybean, ensuring these vital crops remained available for the domestic market. Bryan Acheampong, the then Minister of Agriculture, emphasized the importance of the ban, stating, “This ban is essential to safeguard our food supply and protect the interests of our farmers. We must prioritize domestic needs during this crisis.”
In addition, the government launched a program to purchase existing stocks from farmers to ease the impact of the export ban. Aware of the pressing need to stabilize the food supply, the government also planned to access the ECOWAS Grain Reserve and work with the private sector to import up to 300,000 metric tons of maize and 150,000 metric tons of rice.
The Minister stressed that the government is working tirelessly to secure the necessary imports and assist vulnerable farmers who have lost their crops. In addition to this, 26,000 metric tons of poultry feed would be imported to support the poultry industry, which is also under threat from the drought. For the affected farmers, the government pledged cash transfers of GHC1,000 per hectare, focusing on the 435,872 confirmed affected farmers.
“Our farmers are the backbone of our economy, and we are committed to providing them with the financial support they need during this challenging time,” the Minister stated.
In addition to financial aid, the government launched a replanting program to supply fast-maturing seeds and fertilizers to farmers whose crops had been destroyed by the drought. To prevent a repeat of such a crisis, the Minister announced increased collaboration with the Ghana Meteorological Agency. Through the Food System Resilience Project, the government aims to provide accurate forecasts and advisories to better prepare farmers for future climate challenges.
This crisis occurred at a particularly critical moment, as the affected regions accounted for more than 62% of Ghana’s annual grain supply.
