Inflation Raising Its Ugly Head

Inflation is the general increase in prices and a fall in the purchasing value of money. Inflation is engulfing Ghana's economy and much of it can be attributed to the impacts of the increase in the price of fuel. Inflation instantly affects the well-being of individuals, families, and communities, and in many cases deprives them of basic necessities, including food, medical treatment, education, and the use of utilities that require energy. Individuals or companies can decide to increase the prices of their goods and service to maximize their revenue. Inflation can also be imported, when goods and services are imported from a country where the inflation rate is high, it adversely affects the country where the goods and services are imported.

A large number of economic activities from various regions in Ghana are entirely dependent on greater Accra and greater Kumasi goods, hence an increase in the price of fuel pulls up inflation in the price of almost all products in the economy.

High inflation mainly benefits those who are better off, while aggravating already-existing inequalities in the distribution of wealth and pushing more people into poverty. In times of prosperity and therefore price stability, many low-income families manage to get by but they now face being pushed back into poverty as prices rise again and at a faster pace than their income. In a situation like we see strike action in the government sectors demanding an increase in wages and salaries to correspond with the increase in the price of goods and services.

Members of the middle class, who are seeing a larger proportion of their income going toward more necessities, are forced to use their savings to maintain their standard of living, which leads to resentment, but also unsettles many and leaves them worrying about their future. The rising cost of living has a much psychological face to it as a practical one, as it induces existential fears about whether food can be put on the table, and bills be paid. Inevitably, and with great justification, the governing bodies, politicians, and those who profit from price hikes are seen as responsible for the hardships caused by the rising cost of living and are blame for it.

However, for the vast majority of people, especially those on low wages and the unemployed, there is not much to cheer about. Inflation favors the well-off, who have more disposable income and who are better informed about how to protect their assets from rising prices, and can even increase their wealth in such times. The less wealthy, including those who are employed and seeing their wages rise, are entering a losing race in which prices outpace wage increases, while a larger proportion of their income is spent on basic commodities such as food, transport, and health as these prices can rise faster.

Writer: Seidu Samad

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