In our everyday lexicon, we often hear the phrase “ekrom ayɛ den”—a Ghanaian expression that encapsulates the essence of the cost of living. Ever wondered how much it really costs to live in Ghana? You’re not alone.
As globalisation continues to reshape the world, the dynamics of the cost of living become ever more crucial, especially here in Ghana. From the bustling streets of Accra to the serene villages of the countryside, the cost of living affects us all. But what exactly does it entail?
Beyond just food prices, understanding the ins and outs of expenses is vital for Ghanaians and foreigners alike. In this article, we take a look at the nitty-gritty of what makes up the cost of living in Ghana and share practical tips for managing your finances effectively.
When it comes to the real cost of living in Ghana, housing stands out as a major challenge. Since 2020, rent prices have shot up by around 40% in bustling urban hubs like Accra, making it tough for many to find affordable accommodation. This spike can be influenced by various factors, notably location.
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Meanwhile, the prices of food essentials, which one cannot live without, have been climbing. From staples like maize to beloved cassava, food prices surged by 54% in 2023 compared to 2022, putting a strain on families nationwide. Just two years ago, a ball of Kenkey cost 1-2 cedis, but today, it’s 4-5 cedis. Even a sachet of water, once 20p in 2021, now sets you back 50p. These examples illustrate the consistent upward trend in the prices of food items.
Transportation, too, emerges as a pivotal player in the cost-of-living narrative. In the bustling metropolis of Accra, fuel prices have soared by 75% with a litre of petrol costing averagely 12.69 GHS currently. In contrast, a litre was 7 GHS in January 2022, perpetuating a cycle of escalating transportation costs. The ripple effect extends to rural areas, where limited infrastructure amplifies the financial burden on commuters.
However, the hurdles do not stop there. Healthcare and education costs have become significant burdens, putting immense strain on household budgets. Though the institution of the free-education policy has eased the burden of fees at the Senior High School level, fees across private schools and tertiary institutions have drastically increased.
The average fees for the 2023/2024 academic year at the nation’s premier university, University of Ghana Legon sits at 2,983 GHS for an undergraduate freshman, which is a 20% rise compared to the previous year. The healthcare costs in Ghana continue their relentless ascent, outpacing income growth and if you find yourself without insurance coverage, well, you might as well start practicing your juggling skills because you’re in for a real circus act.
The discussion on the cost of living will be incomplete without reiterating the impact of the depreciation of the cedis against international currencies as Ghana’s economy relies heavily on importation. For context, the Ghana cedi (GHS) has lost a great value to international currencies like United States Dollars (USD), Pound Sterling, etc, which has imperatively contributed to the cost-of-living crisis for the everyday Ghanaian. For context, 1 USD was equivalent to 6 GHS as of January 2022. Today the rate stands at 12.2 GHS which accounts for over 50% decrease in value. Likewise, the inflation rate is noted to be 23.5% in January 2024 compared to 9.89% in 2021. In Ghana, we say when prices go up, they never come down. And as the exchange rate worsens, so does the cost of living for the average Ghanaian.
On the other side, although the average income across the board has increased, it has not increased in the same regard as living costs. In 2023, the Government of Ghana agreed to increase the base pay on the Single Spine Salary Structure by 30%. Again, on 14th November 2023, another agreement was struck to increase the base pay by 23 in 2024 as well as the daily minimum wage from GHS14.88 to GHS 18.15. Though these are commendable efforts to fortify the purchasing power of Ghanaians, they fall short of the ever-rising cost of living. This inequation has strained the saving capacity of Ghanaian households.
Living well in Ghana means being smart with your money. Make a budget that covers your needs and saves some cash. Shop around for the best prices and cook at home to save on food. Use public transport to cut down on travel costs and find affordable healthcare options. Save energy and water, build an emergency fund, and consider investing for the future. With these tips, you can enjoy Ghana’s culture and thrive financially.
In conclusion, the cost of living in Ghana encompasses a wide range of factors that impact individuals and families across the country. From housing and food expenses to transportation, healthcare, and leisure activities, understanding the components of living costs is essential for effective financial planning and management.
As Ghana continues to develop and integrate into the global economy, monitoring and adapting to changes in the cost-of-living landscape will remain paramount. By staying informed and implementing practical strategies for budgeting and expenditure control, both Ghanaians and foreigners can successfully manage living expenses while fully embracing the diverse cultural heritage and abundant opportunities that Ghana presents.