Economist, Dr. Adu Sarkodie, says the Bank of Ghana’s (BOG) approach to dealing with Ghana’s record-high rate of inflation is ineffective.
For him, it’s obvious Ghana’s rising inflation rate stems from the supply other than the demand side; hence, the Central Bank’s adopted measures are bound to fail.
“Let’s admit that our inflation rate is too high. Unfortunately for us as a country, a greater part of our inflation is the supply side inflation and therefore the approach by the Central Bank to fight inflation is ineffective”, he said on the Big Issue.
Ghana’s inflation continues to rise, reaching 27.6 percent in May.
Latest figures from the Ghana Statistical Service (GSS) showed that the figure represents a four percentage points increase in the inflation rate compared to the 23.6 percent recorded in April 2022.
On a monthly basis, inflation however dropped by one percent to record 4.1 percent in May 2022.
The development has raised concerns about Ghana’s rising inflation rate history amid a cost-of-living crisis.
But contributing to discussions on Citi TV‘s news and current analysis affairs program, Dr. Adu Sarkodie wants the attention to be shifted solely from the Bank of Ghana to the efforts by key Ministries such as Finance, Agriculture and Trade whose activities have a direct impact on inflation.
“The Governor himself has admitted that it’s a supply-side inflation. So it should be a comprehensive approach. While the bank is doing its bid with the policy rate, the real sector and fiscal sector must be doing theirs to [reduce] the public debt and borrowing because if the Central Bank wants to control inflation, and government ends up spending more than revenue and keeps borrowing amidst the Cedi depreciation, it will amount to nothing”, he mentioned.
Meanwhile, John Kumah, a Deputy Finance Minister, says the government still has its sights set on stabilising inflation around its 8 percent target.
Speaking on Eyewitness News, Mr. Kumah said, “where we are is way overboard, and we are not happy with it.”