The Centre for Democratic Development (CDD-Ghana) has highlighted a notable improvement in living conditions for many Ghanaians during the first year of the President John Dramani Mahama administration, attributing the trend to macroeconomic stability, currency appreciation, and falling fuel prices.
In its one-year assessment of the Mahama government, CDD noted that while lower inflation technically indicates that prices are rising more slowly, Ghanaians have experienced real price reductions across key sectors, signalling a tangible relief in the cost of living.
Fuel prices at the pump fell by approximately 4% to 8% between December 2025 and January 2026. This drop translated into a 15% reduction in commercial transport fares, directly easing daily commuting costs and the transportation of goods, the CDD report explained.
Food inflation saw a dramatic decline, falling from 28.3% in January 2025 to 4.9% by December 2025, while the cost of imported essentials, including medicines and raw materials, stabilised thanks to the appreciation of the Cedi.
CDD emphasised that while these developments have improved disposable incomes, particularly in major cities such as Accra and Kumasi, regional disparities remain.
Northern areas, for instance, have experienced slower price reductions due to logistical bottlenecks, including poor transport and communication infrastructure.
The assessment highlighted the administration’s ambitious fiscal consolidation efforts. By cutting wasteful spending and terminating underperforming programmes, the government reduced the national deficit from 7.9% to 3.1%, even achieving a temporary surplus by mid-2025.
CDD noted that this fiscal discipline allowed the government to provide direct relief to citizens and entrepreneurs through the abolition of “nuisance” taxes such as the E-Levy, Betting Tax, and Emission Tax, while raising the VAT threshold to protect small businesses.
“The state has managed to stabilise the economy without imposing additional tax burdens on the average Ghanaian,” the report stated.
Despite these achievements, CDD warned that revenue mobilisation remains a significant challenge. Tax revenue currently stands at 16.1% of GDP, below levels recorded in neighbouring countries such as Senegal and Côte d’Ivoire.
The report cautioned that insufficient revenue forces the government to borrow more, potentially raising public debt.
This concern is compounded by the launch of large-scale social and infrastructure projects, including the GH₵13.85 billion “Big Push” infrastructure plan and the “MahamaCares” health trust.
CDD emphasised that while these initiatives promise long-term benefits, they could strain the budget if additional revenue streams are not secured.
The think tank highlighted AI-driven tax compliance measures as a promising solution, which could enhance revenue collection and compensate for the loss of funds from abolished “nuisance” taxes such as the E-Levy.
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Source: www.myjoyonline.com