Ghana Is Suffering Because Of Akufo-Addo

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According to Steve Hanke, founder and co-director of the Institute for Applied Economics and professor of applied economics at Johns Hopkins University, Ghana’s economy is currently in free fall.

He claims that as of Sunday, October 22, 2022, the country’s inflation rate in West Africa is 109 percent.

The Ghana Statistical Service calculated the inflation rate for September to be 37.2%, which is in contrast to Prof. Hanke’s estimate of inflation.

The economist reaffirmed in a tweet seen by GhanaWeb that only a currency board can help stabilize the decline of the Ghana cedi against the US dollar.

He pointed out that Ghana now needs a currency board in the same way as the then-Gold Coast did from 1913 to 1958, or else a debt default will soon occur.

“Ghana’s economy is in a free fall thanks to President Akufo-Addo. I currently estimate Ghana’s inflation to be a startling 109%/year. Debt default is imminent in the absence of a currency board, similar to the one the Gold Coast had (1913–1958), according to Prof. Steve Hanke’s tweet.

Dr. John Kwakye, Director of Research at the Institute of Economic Affairs, has confirmed Prof. Hanke’s claim that a currency board can stabilize the cedi (IEA).

A currency board-style monetary system, he told news in a report, can give the cedi long-term stability, but he cautioned that its installation must be done gradually.

I concur with Prof. Hanke that the cedi can only have long-term stability under a monetary system akin to a currency board. But we should advance in that direction gradually. It is possible to determine all the modalities.

The inflation rate in Ghana

According to the Ghana Statistical Service, the inflation rate in Ghana increased from 33.9 percent in August 2022 to 37.2 percent in September 2022.

From the 33.9 percent rate noted in August 2022, this represents a rise of 2.0 percent month over month.

The rate is, however, also 37.2% greater than in September 2021.

Between August (31.7%) and September (33.9%) 2022, year-over-year inflation increased by 2.2 percentage points.

While non-food inflation was 36.8%, food inflation was 37.8%.

While prices for imported goods increased by 40.7%, prices for locally manufactured goods increased by 35.8%.

The highest food inflation was found in the Western Region (47.0%), whereas the highest non-food inflation was found in the Eastern Region (42.0%). The Greater Accra Region (39.3%), Western Region (40.2%), and Eastern Region (41.0%) all had the highest inflation rates overall.

In the Eastern Region, transportation experienced the highest rate of inflation (68.7%), whereas in the Western Region, fish and other seafood experienced the highest rate of inflation (64.0%).