Until the 2007-2009 recession, the 1981-1982 recession was the worst economic downturn in the United States since the Great Depression. Records show that Ghana suffered a serious famine in the early 1980s. The crisis was the result of a drought that cut cereal production by 13 percent – coupled with widespread bushfires that devastated crop production and coinciding with Nigeria’s expulsion order, giving illegal immigrants there fourteen days to leave the country. Approximately 1.2 million Ghanaians returned home after that expulsion order.
Over the last three years, there has also been a general economic downturn with several countries making efforts to recover from their economic woes. This is underpinned by the Coronavirus pandemic and ongoing Russian-Ukraine war. Just like many others, Ghana`s economy has not been spared the brunt of economic shocks. Gross Domestic Product (GDP) growth rate has been revised downward from actual position of 5.4% in 2021 (2020: 0.5%) to 3.30% for Q1 `2022. Debt to GDP position remains elevated at 78.3% as at August 2022. With the inflation rate skyrocketing to 33.9% as of August 2022, the country has joined the ‘uncelebrated’ list of African countries with the highest inflation. The local currency to the dollar has depreciated by close to 40% and is trading 1US$ to 10.04GH¢. To further deepen the woes, recent Sovereign downgrades by the top three rating agencies have muddied the waters.
Generally, times are hard – and this has impacted the ‘big-3 Fs’ – Food, Fuel and Finances. The key questions that must be asked are: 1) How have you experienced the inflation monster in your personal life? 2) Have you had to employ any cost-cutting measures in your personal life? These are two key areas I would like to share some thoughts on as to how to navigate your way around in challenging times like this. This piece is also inspired by a presentation delivered by Mr. Tsonam Akpeloo, Chief Executive Officer-SUKU Technologies at a Leadership Seminar. Amid the ongoing challenging environment, how do you manage personal finance categories? I will try to tackle some of the key areas.
Health
Your health is your life, and obviously there is a need to pay very close attention to health-related challenges. The biggest health costs are long-term health costs for chronic diseases such as diabetes, heart-attacks, cancer etc. In order to reduce the long-term costs, you just have to stay healthy! Do more exercise, such us simple daily walks. For those who can afford it, it’s recommended to join and use a gym. Visit hospital regularly and stay up to date with annual check-ups. Take advantage of all health insurance packages to examine yourself.
Food & Beverages
I recall visiting a supermarket for some groceries and could pick only 4 items on the shelves with GH¢300. I couldn’t believe my eyes. In times like these, it may be prudent to consider buying non-perishable groceries (e.g. – rice, cereals, water bottles, beans) in bulk on the Tradeford and also in the market-places. Currently, prices of goods and services continue to increase on a daily basis. To make some savings, it`s worth considering buying items from the local markets in bulk that can last for a period.
Do not give small money change; take advantage and collect discounts & coupons that you may find in magazines/newspapers for discount sales. Most importantly, shop from local markets or less expensive shopping malls. I am sure we all know the expensive ones.
Restaurants and Bars
Believe it or not, some restaurants and bars sell food and drinks at exorbitant prices and extort money from the vulnerable. Consider cooking at home more than going out to eat on a regular basis. Home-cooked foods are a healthier option. Even if once in a while you want to give yourself a good treat, do go in for more budget-friendly establishments. If you are someone like me who loves to host parties, it would be appropriate and prudent to host events and parties with friends at home, rather than venues or bars which may cost you more.
Transport
With the upward adjustment in crude prices from the international oil-producing countries, there is that natural tendency for a surge in transport fares across various jurisdictions. Just recently in Ghana – in consultation with the mother-body – the Ghana Private Road Transport Union (GPRTU) of TUC announced to the general public that there will be a 30% increment on fares starting September 21, 2022. Earlier, in May, Transport fares went up by 20 percent; and when the new fares took effect, petrol and diesel were selling at a national average of GH¢9.41 and GH¢11.12, respectively. At the moment, the price of petrol per litre has crossed GH¢11 and diesel sells for over GH¢14 per litre at most pumps.
For local travelling, drive low-consumption cars more often. For colleagues working in the same area in town or children going to the same school or nearby, it may be prudent to consider carpooling to reduce fuel costs. Sadly, in Ghana everybody wants to look good and drive; and so carpooling is unattractive to many. Aside from carpooling, it is better to use shared ride services like Uber share, Bolt or public transportation like trotros.
For international travel, remember to book flights and hotels earlier and through online discount websites; or download apps such as Bookings.com, Skyscanner and Expedia to have varied options. Interestingly, experts say that Sundays at 7pm (for departure location) is the best time to book cheaper flights.
Education
Education is good – and trust me, there is no way I will compromise my kids’ education. I am sure many of us reading this article share similar views. However, in times like these one may consider foregoing expensive after-class tutoring for cheaper alternatives online. Education materials are available online – such as Khan Academy for all ages and multiple subjects. https://www.khanacademy.org/.
People allow ‘peer pressure’ to lead and send their wards to expensive schools whose dollar-denominated fees they can’t afford. It`s better to rather look for moderate, affordable and quality education for kids.
Education
Education is good – and trust me, there is no way I will compromise my kids’ education. I am sure many of us reading this article share similar views. However, in times like these one may consider foregoing expensive after-class tutoring for cheaper alternatives online. Education materials are available online – such as Khan Academy for all ages and multiple subjects. https://www.khanacademy.org/.
People allow ‘peer pressure’ to lead and send their wards to expensive schools whose dollar-denominated fees they can’t afford. It`s better to rather look for moderate, affordable and quality education for kids.
On a personal level, self-development is very important; one can enrol in free or subsidized online certificates and programmes such as Coursera: https://www.coursera.org/,EdX: https://www.edx.org/, Udemy: https://www.udemy.com/, Skillshare:https://www.skillshare.com/ to broaden knowledge.
Vacations
Many working class people in Ghana rarely take a break and/or go on vacation. However, if you desire to go vacation, it may be good to consider vacations in low traffic season such as April, late or early summer (May or September) or October. Venture into more local African destinations to support local tourism. In Ghana, there are several cheaper destination centres such as the Kakum Forest, Crocodile Ponds and several waterfalls within the country to explore.
Consider external vacations in North Africa – Morocco, Egypt (direct flights via Royal Air Maroc or Egyptair); East Africa – Rwanda, Kenya (Rwandair, Kenya Airways). Explore more affordable luxury destinations.
Cosmetics
To make some cost savings, buy local products and refrain from importing cosmetics from abroad, which has impacted the local currency. You may consider ordering from Laam Shea: https://laamshea.com/,CedarWoman;https://cedarwomanghana.com/,Ghandour:https://www.ghandourcosmetics.com/. It is always best to buy products such as soap, shampoo and conditioner in bulk.
Clothing
It`s an undeniable fact that men are moderate in spending on clothing as compared to women. I say this because a gentleman can survive on a few nice tops and t-shirts for months and still look decent. I have a lady-friend who sews a dress for each occasion and doesn’t wear it twice. For readymade clothes, explore more affordable online markets. For Tailor-made clothes, seek out less expensive but quality brands: Kiki (Made in Ghana): https://kikiclothing.com. Woodin Fashion (Made in Ghana): https://www.woodinfashion.com.
The list and strategies go on unendingly, and the key takeaway is that times are hard and may continue to be hard if Ghana doesn’t become self-sufficient in production. It is therefore important to adopt a positive attitude whereby one tries to consolidate the overall social support system. Take an audit and adjust your lifestyle. Avoid impulse-buying and rather buy in bulk to make savings.
In doing all the above, strive to save no matter how small the salary; and try to invest as well. Also, if your salary seems insufficient you need to get a side-hustle. Married people should both work so everyone brings some money home.
Thank you for reading and sharing.
Disclaimer: The views expressed are personal views and don’t represent those of the media house or institution the writer works for.
About the writer
Carl is a Banking, Finance, and Investment professional with an International Bank in Ghana. Contact: [email protected], Cell: +233 200301110
