A former Deputy Defence Minister, Dr. Tony Aidoo, has described as unrealistic the measures announced by government to rescue the economy.

According to the NDC stalwart, the Akufo-Addo government has thrown the country into turmoil and the prospects are not good.

Government has announced that it will pump an amount of $2 billion into the economy to curb the continuous depreciation of the cedi.

Government also announced a 30% salary cut for its appointees as part of austerity measures to resolve the prevailing economic crisis.

In support of this gesture, members of the Council of State have also agreed to forfeit 20% of their monthly allowances up to the end of the year.

https://www.myjoyonline.com/government-to-pump-2bn-into-economy-to-curb-cedi-depreciation-jubilee-house/

This forms part of measures by President Akufo-Addo to mitigate the hardships being experienced by the populace.

But speaking on Joy FM's Super Morning Show, on Thursday, Dr Aidoo said the BoG got the approach wrong.

According to him, the increase in policy rate is “a typical capitalist solution to a peripheral capitalist problem.”

“In Ghana, the money in circulation is not credit money, it is hard cash so what has hard cash transaction got to do with credit? Policy rate got to do with credit,” he said.

He added that “the form of that liquidity is very important to identify and if the form of liquidity is hard cash and not credit where has interest rate got to do with the use of hard cash in transactions? How do you mop up the excess liquidity in terms of hard cash and not credit?”

In his view, government should “have identified the problem as not one of demand but of supply” and tackled it as such.