Ghana has emerged as one of the most affordable countries to live in Africa, according to a recent report by Numbeo, a global database of consumer prices. The report ranked Ghana 20th out of 24 African countries in terms of cost of living, based on factors such as rent, groceries, restaurant purchases, and local purchasing power.
The report, which was updated in February 2024, showed that Ghana’s overall cost of living index was 26.0, meaning that living in Ghana is 74% cheaper than living in New York City, which has an index of 100. The report also revealed that Ghana’s rent index was 11.0, its cost of living plus rent index was 18.8, its groceries index was 27.2, its restaurant price index was 22.9, and its local purchasing power index was 14.8.
The low cost of living in Ghana can be attributed to several factors, such as reduced inflation, a slowdown in the depreciation of the Ghana cedi, and the availability of local products and services. According to the Bank of Ghana, the end-of-year inflation rate for 2023 was 23.2%, down from 28.5% in 2022. The Ghana cedi also experienced a year-to-date depreciation of 15.57% against the US dollar in the retail market, compared to 18.32% in 2022.
Additionally, Ghana has a vibrant informal sector that provides goods and services at lower prices than the formal sector. According to the Ghana Statistical Service, the informal sector accounted for 86.1% of the total employment in 2023, up from 85.3% in 2022. The informal sector also contributes to the local purchasing power of Ghanaians, as it enables them to buy more goods and services with their income.
However, Ghana’s low cost of living does not necessarily mean that the country has a high standard of living. The report also showed that Ghana ranked low in terms of quality of life, safety, health care, and pollution. Ghana’s quality of life index was 54.8, its safety index was 40.9, its health care index was 50.9, and its pollution index was 77.9. These indices indicate that Ghana still faces challenges in improving its social and environmental conditions.
Moreover, Ghana’s low cost of living may not be sustainable in the long run, as the government plans to introduce new taxes to boost its revenue outlook. The 2024 budget statement, which was presented to parliament in November 2023, proposed a 1.75% levy on electronic transactions, a 20% tax on betting and gaming, and a 5% tax on luxury vehicles, among other measures. These taxes are expected to increase the cost of living for many Ghanaians, especially the low-income earners.
Therefore, while Ghana may be among the most affordable countries in Africa, it still has a lot of room for improvement in terms of its economic and social development. The government and the private sector should work together to create more opportunities for growth, innovation, and inclusion, while ensuring that the cost of living remains reasonable and fair for all.
Source: Pulse
