Ghana's annual producer price inflation slowed to 21.8 percent in February from a revised 23.6 percent year-on-year the month before, driven by declining prices of gold and refined petroleum, the national statistics office said on Wednesday.

The figure, which is high compared to average inflation in the region, is an indication of fiscal challenges facing the West African country.

Ghana has reached an agreement with the International Monetary Fund for a $940 million aid package to stabilise an economy dogged by deficits and widening debts.

The statistical office said producer inflation for the Mining and Quarrying sub-sector decreased most by 7.1 percentage points, driven by gold prices. Manufacturing, which comprises petroleum refining, fell one percentage point.

"Overall, the pull-down factors in the producer index for all industry in February were declining gold prices and a decrease in the cost of refined petroleum," government statistician Philomena Nyarko said.

The month-on-month change in PPI between January and February was 1.4 percent, Nyarko said.

Producer price inflation is an advance indicator of consumer price inflation which inched up to 16.5 percent February, from 16.4 percent the month before.