Ghana’s inflation rate jumped to the highest level in almost 19 years as bus fares and other transport costs surged.

Annual inflation accelerated to 29.8% in June from 27.6% a month prior, Government Statistician Samuel Kobina Annim told reporters Wednesday on a conference call. That’s the fastest pace since December 2003, and the rate has now exceeded the central bank’s target band of 6% to 10% for 10 months. The median estimate of seven economists in a Bloomberg survey was 29.9%.

The gap between the rise in prices of imported and domestic goods widened to the biggest since December, a sign that the weakening cedi — Africa’s worst-performing currency this year — is pushing inflation higher. The cedi has weakened 24% since January.

Cedi Inflation

Ghana’s imported inflation is widening over local goods

The sustained increase in prices has triggered protests in the West African nation and calls for cost-of-living allowances. With economic conditions deteriorating, Ghana’s central bank will be hard pressed to increase its key interest rate for a third time this year after hiking by 550 basis points since November. 

“The Bank of Ghana would want to hold the rate to see how its intervention has filtered through the market, especially when most of what is happening is supply-side driven,” Courage Kwesi Boti, an economist at Accra-based GCB Capital Ltd., said before the release. It will also give the monetary policy committee time to assess the impact policies announced by the Finance Ministry in its mid-term budget review later this month will have on taming inflation, he said.

Africa’s second-biggest cocoa producer postponed the budget review until initial meetings with the International Monetary Fund for an economic program have been completed. The government approached the IMF for funding this month, reversing course after repeatedly saying it would not seek a monetary program. It’s seeking as much as $1.5 billion from the lender to shore up its finances.

An IMF team arrived in the country last week for talks and is scheduled to conclude its visit on Wednesday.

Annual food-price growth quickened to 30.7% from 30.1% in May and non-food inflation accelerated to 29.1% in June from 25.7% the previous month, with transport costs surging 41.6%. Prices climbed 3% in the month.

Driving Inflation

Ghana’s transport prices pushed inflation to a 19-year high

Ghana’s MPC is scheduled to announce its next rate decision on July 25.