The combined effect of rising inflation, cedi depreciation, multiple taxes and little or no increase in wages/salaries have significantly weakened the consumer purchasing power of Ghanaians.
Other challenges such as increasing prices of goods and services, high utility tariffs and rising fuel prices in an era of low crude oil prices on the world market have made Ghanaians worse off.
Consequently, Ghana has been ranked among countries in sub-Saharan Africa with the lowest consumer purchasing power.
This means that the cost of living in Ghana is the fourth highest in sub-Saharan Africa based on a basket of selected items.
Mr Lampe Omoyele, Managing Director of Nielsen West Africa, a global marketing research firm, said this in Accra when he delivered a lecture organised by the Chartered Instituted of Marketing Ghana (CIMG).
The lecture, on the topic ‘Winning with the Consumer and the Shopper, was a Citi FM collaboration with CIMG as part of Citi Business Festival.
Mr Omoyele said the cash outlay for Ghanaians is one of the highest in sub-Saharan Africa.
Purchasing power is important because, all things being equal, inflation decreases the amount of goods or services you would be able to purchase.
Consumer purchasing power indicates the degree to which inflation affects consumers' ability to buy.
Least affordable food basket
Mr Omoyele revealed that using a basket of selected items, Ghana ranked fourth as the least affordable in sub-Saharan Africa.
Items in the basket
Items in the basket comprises 500 grams of fresh white bread, 1 kilogramme (kg) rice, 12 eggs, 1kg chicken, 1kg tomatoes, 1kg potatoes, 1litre of regular milk, 1.5 litres of bottled water, 330 millilitres of soda, 1-way public transport ticket, 1L fuel and 1 minute prepaid airtime (no discount/plan).
Ghana recorded $27.50 for the above food basket in fourth position while war-torn South Sudan came first with $38.60; oil-rich Angola was in second position with $33.57 while war-torn Democratic Republic of Congo was third with $28.80.
Behind Ghana is Cote D’Ivoire with $24.55.
Most affordable food basket
Uganda has the most affordable food basket of $10.99, followed by Lesotho with $14.70; Swaziland, $14.99; Kenya, $15.06; and South Africa, $15.33.
Lampe Omoyele said challenges such as supply issues and infrastructure, as well as wages have not improved, resulting in weakened consumer purchasing power.
“When that happens, then consumers begin to rationalise. This means they don’t have enough money to spend and they rationalise by doing away with some of the things they feel are not important,” he said.
How are Ghanaians coping?
To cope with the situation, Mr Omoyele argued that Ghanaian consumers are redefining their value by moving to more affordable brands/categories, choosing different package alternatives and sizes, as well as rationalising quantity and frequency of consumption.
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