The Institute of Economic Affairs is proposing a number of measures to address the rising rate of inflation.

They include reinforcement of measures to ensure that food stocks are easily transported from farm gates to markets, reduction of some of the fuel taxes/levies and the use of part of government’s windfall gains from higher oil prices to cushion pump-prices.

“Regarding food, we call for reinforcement of measures to ensure that food stocks are easily transported from farm gates to markets. We call for subsidies on basic staples like maize, rice, cooking oil and bread; regarding fuel, we call for reduction of some of the fuel taxes/levies and the use of part of Government’s windfall gains from higher oil prices to cushion pump-prices and regarding transport, we call for expansion of public transport and subsidization of fares to cushion the masses”.

Furthermore, the IEA said “we indicated that Ghana has been experiencing much higher inflation than most of our peers, who have been equally affected by Covid-19 and the Russia-Ukraine war. Our situation has been worse because of our strong underlying economic vulnerabilities, especially food and fuel supply and distribution inadequacies as well as perennial exchange rate instability.”

“These structural vulnerabilities have been compounded by demand pressures attendant to our overly lax fiscal and monetary policies. While the focus may now be on the immediate crisis, it will take far-reaching, comprehensive measures to address the underlying vulnerabilities and policy lapses in order to achieve durable price stability in the country”, it pointed out.   

Enforce forex laws to deal with cedi volatility

Regarding the exchange rate, it called on the Bank of Ghana to enforce the foreign exchange laws, including relating to forex carry-on limits for travellers, forex trading, pricing of goods and services in forex and forex transfers through banks.

“We also call on the Bank of Ghana to negotiate with foreign companies to stagger repatriation of their dividends and profits to reduce pressure on the exchange rate”, it added.