Governor of the Bank of Ghana (BoG), Dr Ernest Addison has explained why food prices increased last year.
He attributed the development to the dry weather conditions experienced in farming communities in the early part of 2024 resulting in low yields.
Addressing the 122nd Monetary Policy Committee (MPC) press conference in Accra on Monday January 27, Dr Addison said that “Price developments in 2024 indicated a slowdown in the disinflation process resulting mainly from food price pressures. At the beginning of the year, inflation rose from 23.2 percent in December 2023 to 25.8 percent in March 2024.
“Thereafter, it declined steadily to 20.4 percent in August but has since risen to 23.8 percent in December 2024, primarily due to food price increases. The increased prices in the food sector were largely attributable to dry weather conditions experienced in the earlier parts of the year, which adversely affected harvest yields. In contrast to food inflation, non-food inflation declined steadily during the last quarter of the year, settling at 20.3 percent.”
Ghana’s agricultural sector was on the brink of a crisis as severe drought conditions endangered the livelihoods of over 928,000 farmers and jeopardised the nation’s food security.
The dry spell devastated key agricultural regions across Ghana, with reports indicating that nearly half of the 1.8 million hectares of farmland were impacted.
The Ministry of Food and Agriculture had estimated a staggering GHC3.5 billion loss in farmer investments, with potential revenue losses reaching GHC10.4 billion.
To prevent further damage, the government enacted a temporary ban on the export of grains such as maize, rice, and soybean, ensuring that these critical crops remain available in the domestic market. “This ban is essential to safeguard our food supply and protect the interests of our farmers,” stated the then Minister of Agriculture, Bryan Acheampong. “We must prioritize domestic needs during this crisis,” he advised.
Additionally, the government initiated a programme to mop up existing stocks from farmers to mitigate any adverse effects of this ban. Recognizing the urgent need to stabilize the food supply, the government planned to tap into the ECOWAS Grain Reserve and collaborate with the private sector to import up to 300,000 metric tons of maize and 150,000 metric tons of rice.
“We are working tirelessly to secure these imports and support our vulnerable farmers who have lost their crops,” the Minister emphasized.
Furthermore, 26,000 metric tons of poultry feed would be imported to support the poultry industry, which is also facing threats from the drought. For the affected farmers, the government promised to provide cash transfers amounting to GHC1,000 per hectare, targeting the most vulnerable among the 435,872 confirmed affected farmers.
“Our farmers are the backbone of our economy, and we are committed to providing them with the necessary financial assistance during this difficult time,” the Minister added.
Alongside financial support, the government also launched a replanting programme tol offer fast-maturing seeds and fertilizers to farmers whose crops had failed due to the drought.
“To prevent a recurrence of this disaster, we are enhancing our collaboration with the Ghana Meteorological Agency,” the Minister said. “Through the Food System Resilience Project, we aim to provide accurate forecasts and advisories to better prepare our farmers for future climatic challenges.”
This crisis came at a critical time, as the affected regions contributed over 62% of Ghana’s grain supply annually.
The post Governor Addison explains why food prices went up last year first appeared on 3News.
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