A Senior Finance Lecturer, at the University of Ghana Business School, Prof Godfred Alufar Bokpin, has intimated that successive Ghanaian governments have all failed at curbing inflation in the country.
He said in spite of various structural reforms, there has not been any significant improvement in the management of the economy since Ghana’s independence.
“Since we assumed the reign of this country both in terms of political and fiscal monetary, we have never been able to tame inflation. Inflation in 1964 was 0.98% but at the end of 1965 inflation had jumped to 26.4%
“And we are almost heading to the point where we would say Ghana is becoming a failed state,” he said.
He said this on Saturday on JoyNews’ Newsfile during discussions that centered on inflation. The discussion has been necessitated by recent figures that indicate that there has been a hike in inflation in the country.
Ghana’s inflation jumped to 27.6% from the 23.6% recorded in April 2022, according to recent figures from the Ghana Statistical Service (GSS).
The GSS blamed this on the increase in transport fares and food prices.
According to the Government Statistician, Professor Kobina Annim, the rate of inflations for transport (39.0%), household equipment and maintenance (33.8%), housing, water, gas, and electricity (32.3%), and food and non-alcoholic beverages (30.1.6%) were higher than the national average (27.6%).
In May, 2022, 12 of the 13 divisions recorded inflation rates higher than the rolling average from June, 2021 to May, 2022.
Also, the major drivers based on the year-on-year figures show that grapes, which is imported, saw a 100.8% inflation followed by diesel, 81.1%, also imported.
Firewood also saw 73.7% year-on-year inflation.
Below is the full list of the top 15 drivers of inflation in Ghana:
Prof Bokpin had earlier asked the government to adopt a fiscal policy approach toward mitigating inflation in the country.
According to him, the monetary policy has proven to be inefficient.
Contributing to discussions on Super Morning Show, on Thursday, June 9, that centered on the country’s current inflation rate, the Professor stated that “if you look at the disparity between the inflation and the policy rate and the Treasury bill rate, it tells you there’s a lot more work to be done and we cannot look to the monetary policy because the problem is from the fiscal side.
He explained that “the monetary policy is constrained in terms of how we can deploy that effectively to contain inflation and engineer growth.”
The Professor, therefore, stated that we cannot look to monetary policy to tackle this.
“We must shift our attention to the fiscal side so that the fiscal side will respond appropriately with the discipline that it requires,” he stressed.
“Once the source of the inflation is largely fiscal, then there’s a limit to how far you can deploy the monetary policy to bring down inflation and then engineer growth,” he added.
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