The Economist Intelligence Unit (EIU) is warning Ghana and some other African countries that headline inflation will remain high, fuelling public discontent in 2023 and 2024.
In it 2023 Africa’s Operational Risk Outlook, the UK-based firm, said the elevated headline inflation will be driven by high global commodity and food prices, and local-currency weakness against the US dollar, amongst others.
“Regional headline inflation will remain high, driven by still-high global commodity prices, lingering supply-chain tightness, high regional food prices and local-currency weakness against the US dollar for most countries, fuelling discontent in 2023-24—as already seen in Ghana, South Africa, Kenya, Tunisia and Madagascar”.
‘Inflation also continues to run high as subsidy regimes buckle under the fiscal strain—including in Angola, Malawi, Nigeria, Ethiopia, Sudan and Madagascar”, it pointed out.
Furthermore, it warned that public dissatisfaction over worsening living conditions could manifest itself in the form of frustration against affluent foreigners and attacks on private property and could lead to an uptick in both violent crime and demonstrations
Additionally, a continued sharp rise in price growth could result in a decline in living standards and an increase in public frustration, as wages have not risen as quickly as inflation across the region. This makes it harder for poorer households to purchase basic staples.
EIU furthered that the situation is crucial against a backdrop of entrenched widespread poverty and high unemployment across most of Africa. It added that protests could push workers employed by large manufacturers to co-ordinate large-scale strikes to demand salary increases.