The World Bank estimates that nearly 850,000 people in the country were pushed into poverty in 2022 due to rising food prices.
It also said food insecurity significantly increased with a quarter of the population, about 7.7 million people deemed to be food insecure by the end of 2022, adding that food insecurity would remain elevated till the end of the year.
This is contained in the 7th Ghana Economic Update report by the World Bank titled "Price Surge: Unravelling Inflation's Toll on Poverty and Food Security."
Authored by three economists of the World Bank, Kwabena Gyan Kwakye Economist, Paul Andres Corral Rodas, Senior Economist and David Elmaleh, Senior Economist, the yearly analytical report examined Ghana's economic developments and prospects and this year's report focused on the impact of inflation on the household.
"High inflation in Ghana in 2022 led to catastrophic effects on food security and poverty, rising inflation disproportionately affected the less well of, who allocate a larger share of their budget to food," the report said.
It explained that farmers were susceptible to global fertiliser price fluctuations and most of the fertilisers used in the country were imported, adding that "Higher fertiliser prices contributed to more expensive locally produced goods which followed the trend of imported-stuffs."
The report further highlighted that food inflation outpaced non-food inflation leading to worsened impacts for the country's vulnerable populations.
"Since the poorest devote a larger share of their budgets to food and food is not easily substitutable, especially at subsistence levels, this leaves them more vulnerable to rising prices. Inflation eroded household purchasing power, with wages and salaries unlikely to keep pace with price increase," it said.
The report indicated that the poorest 20 per cent of households devoted a higher share of their budget to food and were more affected by inflation and farming households did not benefit from high food prices, as they often produced for their own consumption, and faced increased input costs.
Among other suggestions, the report said that short-term measures should include flexible social protection programmes to support vulnerable households.
"Long-term strategies should focus on enabling farmers to adjust to global demand and market opportunities," it said.
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It further called for investment in agriculture, climate-smart initiatives, infrastructure, and income diversification to enhance resilience and livelihoods, adding that support for food self-sufficiency, and trade facilitation were crucial.
The World Bank Country Director for Ghana, Liberia, Sierra Leone, Africa Western and Central Region, Pierre Laporte, in his remarks during the launch of the report, said the next two years would be very delicate for Ghana.
He said Ghana would face the challenge of bringing the economy back on track, without which no meaningful poverty reduction could happen.
"But doing so, it will also have to beef up safety nets to protect the most vulnerable - an area that Ghana can do much more on," Mr Laporte, said, and commended the government for the bold step of doubling the benefits of the Livelihood Empowerment Against Poverty (LEAP) transfers.
To mitigate the impact of inflation on food security, the World Bank Country Director stated that farmers needed to adjust to global demand and take advantage of market opportunities.
He said Government policies should be evidence-based and aim at alleviating the different constraints farmers face.
Mr Laporte said they should also be geared toward addressing market failures in the agricultural value chains and improve agricultural productivity.
He said the policies should as well enhanced market access for farmers to help improve domestic food security and reduce import dependency for staples.
