Claim: Inflation rate was 6% a year ago, according to Mr Fuseini Issah, former Member of Parliament for the Okaikwei North constituency.
Ghana’s inflation rate was never 6% at any point in 2021.
The Member of Parliament (MP) for the Okaikwei constituency in Greater Accra, Mr Fuseini Issah, was contributing to TV3’s morning show panel discussion, The Big Issue, on Wednesday, August 17, 2022. The discussion bordered on the causes of Ghana’s weak macroeconomic indices, including the inflation rate. Though the MP conceded the indicators were not looking good, he would not attribute it to economic mismanagement. Rather, he said external factors, including the ongoing Russian-Ukrainian War, which started earlier this year, were to blame for the challenges. According to Issah, the economy was blossoming before the war began. In trying to prove that, he said inflation, one of the indicators of the performance of the economy, was as low as 6% a year ago.
“Don’t forget that a year ago, inflation was 6%, and this [the economic downturn ] is not unique to the Ghanaian situation [but is] everywhere in the world,” he defended.
The video was published on the TV station’s Facebook page and generated about 8,000 views at the end of the first day (Wednesday). Mr Issah’s assertion could be heard from the 12 to 26 seconds of the 57th minute of the video.
According to the International Monetary Fund, inflation measures how much more expensive goods and services have become over a certain period of time, usually a year. Consumers’ cost of living depends on the prices of many goods and services and the share of each in the household budget. To measure the average consumer’s cost of living, government agencies conduct household surveys to identify a basket of commonly purchased items and track the cost of purchasing this basket of items over time.
The cost of this basket at a given time relative to a base year is the consumer price index (CPI), and the percentage change in the CPI over a certain period is consumer price inflation, the most widely used measure of inflation. For example, if the base year CPI is 100, and the current CPI is 110, the inflation is 10% over the given period.
Ghana Statistical Service (GSS) is an agency statutorily mandated to undertake these household surveys in Ghana. The GSS usually conducts such surveys every month. Thus, the last time the GSS undertook a survey such as this was in July 2022. According to the report, contained on page 5 of a press release by the GSS on August 10, the inflation rate for July 2022 stood at 31.7%. The same page of the release reports, among others, the rate of inflation for the corresponding month in 2021, that is, July 2021 as 9%, and not 6%, as asserted by Fuseini Issah.
The following is a graphical representation of, among others, the July 2021 inflation rate, sourced from the Ghana Statistical Service:
This inflation figure is corroborated by that which the Bank of Ghana reported in its September 2021 Monetary Policy Report on Inflation Outlook and Analysis (see page 4).
The former MP’s assertion is still not tenable even assuming he was referring to any month in 2021 other than July or the average rate for the months up to July or even up to December. According to page 3 of a January 2022 Consumer Price Index Report by the GSS, the inflation rate for any month from January to December in 2021 was higher than 6%. Again, both the average inflation rates for the months up to July and for the months up to December were still more than 6%.
In 2021, the average inflation rate for the months up to July, calculated by adding all of the monthly figures from January to July and dividing the result by seven, was 9.04%. Likewise, the average inflation rate for the months up to December, calculated by adding all of the monthly figures from January to December and dividing the product by 12, was 9.95%.
The monthly inflation rates for 2021 are shown in the following graph, sourced from the GSS:
Source: Ghana Statistical Service
Based on data by Ghana Statistical Service and the Bank of Ghana, Ghana’s inflation rate for any month, as well as its monthly average inflation at any point in 2021, was higher than 6%. Thus, the assertion by the former Member of Parliament for the Okaikwei North constituency in the Greater Accra region, Mr Fuseini Issah, that Ghana’s inflation was 6% a year ago, is completely false.