Ghanaians Struggles As The Country’s Misery Index Rises To 60.8 In July

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Ghanaians endure hardship as country’s Misery Index jumps to 60.8 in July
Ghanaians endure hardship as country’s Misery Index jumps to 60.8 in July

Ghana’s Struggle Index rose to 60.8 in July, nearly doubling the 31.51 recorded at the end of 2021. This also compares to Nigeria’s 62.79 calculated for July 2022.

The index reflects Ghanaians’ current difficult economic conditions, which include currency depreciation, high inflation, and an increasing external debt burden.

The Misery Index is an economic indicator that attempts to track a variety of economic statistics in order to quantify the degree of economic misery felt by ordinary people in a given economy.

According to Hanke (2011), the misery index is calculated by adding the unemployment rate, inflation rate, lending rates, and the country’s GDP growth rate. Otherwise, it is written as follows: Unemployment + Inflation + Bank Lending Rates – GDP Growth Rate = Misery Index).

Ghana’s misery
Nairametrics examined data from Ghana’s Statistical Service and the Bank of Ghana to investigate the level of misery in Ghana. Thus, based on the most recent available data for inflation (31.7%), unemployment (19%), lending rate (13.4%), and GDP growth rate,

Ghana’s most recent Misery Index is 67.4 (31.7% + 19% + 13.4% – 3.3%).
Based on the data, it is clear that inflation and the lending rate are the primary causes of Ghana’s economic difficulties.

It is worth noting, however, that the high loan rate reflects the Bank of Ghana’s efforts to keep inflation under control.

Read Also:  Nigeria’s Inflation Jumps 17-Year High To 19.64%

The components of Ghana’s Misery Index are summarized below.

31.7% inflation
Ghana’s inflation rate increased from 29.8% to 31.7% in July 2022. This was the fastest rate since November 2003, and it was the eleventh consecutive month that the rate exceeded the upper limit of the central bank’s target range of 6% to 10%.

This rapid inflation has been linked to trade disruptions caused by the Russian-Ukrainian war, as well as a drop in the cedi’s value, which increased the cost of imported goods such as cooking oil and gasoline.

Since the beginning of the year, the Ghanaian cedi has fallen by 47.10% against the US dollar, making it the world’s second-worst performing currency after the Sri Lankan rupee.

In comparison to the inflation rate in Nigeria

Unemployment is 13.4%.
According to Ghana’s 2021 Population and Housing Census, the unemployment rate is at an all-time high of 13.4%, nearly tripling the 6% recorded in 2010.

This means that more than 1.55 million of the country’s economically active population are unemployed.

 

Nonetheless, Ghana’s unemployment rate remains low when compared to Nigeria’s 33.3%.