Finance ministry and others need to be disciplined to deal with rising inflation – Economist
Dr Adu Sarkodie, an economist has argued that strategies adopted by the Bank of Ghana to fight inflation may not yield results without multi-sectoral support from some key government institutions.
He added that Ghana’s record-high inflation of 27.6%, which is primarily supply-driven, requires key Ministries – Trade, Finance and Agriculture to institute policies that will reduce public debt and borrowing.
Dr Sarkodie believes these policies will enhance fiscal discipline on the part of various Ministries, which will consequently tackle inflation.
“The fight against inflation has not been effective because it is a supply-side issue, so the Bank of Ghana is doing its part. The onus lies on the supply side, the fiscal side and the real actors like the Ministry of Finance to be fiscally disciplined.”
“The Agricultural Ministry must answer some questions, Trade and Industry must answer some questions. All the other actors must be part of this solution, not only the Central Bank,” he argued.
In May 2022, the Bank of Ghana increased interest rates from 17% to 19% in a bid to address inflation.
But economists have cautioned that the continual rise in interest rates may worsen the country’s economic challenges.
Mr Sarkodie rehashed these concerns, emphasising the need for Ghana to adopt “a better approach where we will all not lose.”
Professor Samuel Kobina Annim, the Government Statistician, has already said the current rising inflation in the country has more to do with the country’s fiscal policies rather than monetary policy.
He then revealed that confirmed data collected by the Ghana Statistical Service points to the fact that the rising cost of goods can only be tackled through policy decisions taken by the government on the supply side of things.
