Ghana Inflation Drops to 5.4% as Reserves Hit 27-Year High

Ghana just pulled off one of the most remarkable economic recoveries in recent African history, and the numbers tell a story of discipline paying off in spectacular fashion.

The Bank of Ghana declared 2025 a historic "year of restoration" after inflation crashed from 23.8% in December 2024 to just 5.4% by year's end. For everyday Ghanaians, that means the painful price increases that squeezed household budgets for years have finally eased.

Governor Dr. Johnson Asiama shared even more striking news at his New Year briefing on Friday. The country's foreign reserves surged to over $13.8 billion, enough to cover nearly six months of imports. "I've not seen such levels since I joined the Central Bank way back in 1995," Asiama said.

The turnaround didn't happen by accident. Ghana's central bank stuck to a tough plan of monetary discipline and launched a strategic program purchasing domestic gold to strengthen reserves. They also brought new transparency to foreign exchange markets and tightened banking oversight.

Just a few years ago, Ghana faced serious economic stress. Currency instability and soaring inflation threatened the livelihoods of millions. The recovery required what Asiama called "difficult judgments and sustained discipline."

The Ripple Effect

This restoration means real relief for Ghanaian families who've weathered years of economic uncertainty. Stable prices make it easier to plan household budgets, save money, and invest in the future. A stronger currency and healthier reserves give businesses confidence to expand and hire.

The achievement also offers hope to other African nations facing similar economic pressures. Ghana's data-driven approach shows that disciplined monetary policy, even when it requires short-term sacrifice, can deliver transformative results.

Governor Asiama was careful not to declare victory too soon. He emphasized that these gains carry "a responsibility to act with humility" and warned against complacency. The foundation is built, but protecting it requires continued vigilance.

For a country that's endured significant economic challenges, seeing inflation fall by more than 18 percentage points in one year while reserves hit three-decade highs represents exactly what restoration looks like.