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Ghana’s inflation is 77%; not 32% – Prof Steve Hanke ‘exposes’ Gov’t figures

US-based Economist, Professor Steve Hanke has criticised President Nana Akufo-Addo for the failing economy, exposing officials over inflation figures in the West African country.

This month, year-on-year inflation announced by the Ghana Statistical Service after its monthly monitoring for the month of July crossed the 30% mark to hit 31.7%.

The increase in inflation, officials noted, was once again fuelled by Transport (44.6%); Housing, Water, Electricity, Gas and Other Fuels (43.0%).

But Hanke, a professor of Applied Economics at the John Hopkins University in the US has in his calculations disputed Ghana’s inflation figures by officials.

In a tweet, the economist who has been monitoring the economic situations in over hundred countries globally said Ghana is in 6th place in this week’s inflation table.

“On August 18, I measured Ghana’s #inflation at a stunning 77%/yr-more than 2x the official inflation rate of 32%/yr,” Hanke stated.

Cedi depreciation and anger

The Ghana Union of Traders’ Associations (GUTA) has announced its members will close all their shops on Monday, August 29, to demonstrate against the persistent depreciation of the Ghana Cedi.

A busy street at Accra Central

The depreciation, the union said, is having a negative impact on their businesses as import charges have gone off the roof.

Addressing a press conference on Monday, the President of the Association, Dr Joseph Obeng stressed that, the worsening state of the Cedi has eroded the gains of businesses after the COVID-19 pandemic.

GUTA’s warning follows a dollar shortage in Accra’s forex market last week as the rate of depreciation of the Ghana cedi neared GH¢10 to one US dollar.

While some banks were quoting ¢9.95 to a dollar, others sold a dollar for ¢9.90 over the weekend.

Currently, the situation has worsened as some forex bureaus as of Monday were quoting between ¢9.97 and ¢10.5 to one American dollar.

As of Monday, August 15, 2022, the cedi had lost about ¢3.15 on the face value to the dollar since the beginning of the year.

Prof Steve Hanke says to put an end to Ghana’s economic death spiral, managers of the economy must install a #CurrencyBoard.

Again, Prof. Hanke in another tweet advised the Akufo-Addo government to temporarily stop the Bank of Ghana from determining the cedi’s value against major trading currencies.

“Since Jan 1, 2020, the Ghana’s #cedi has depreciated by a stunning 42.3% against the USD. Now, Ghanaians are shutting businesses down in protest. When will Pres. Akufo-Addo learn? Ghana MUST mothball its central bank & install a currency board!,” the economist said in a tweet.

Government’s Efforts

The Akufo-Addo government has said despite running to the IMF, officials are working tirelessly to halt the currency depreciation.

Ghana’s Information Minister, Kojo Oppong Nkrumah, has revealed the government is expected to inject some $2 billion into the Ghanaian economy shortly.

The Ofoase Ayirebi Legislator hinted in Accra the 750 million dollars expected from the Afremix Bank will hit the accounts of the Bank of Ghana this week, whilst the cocoa syndicated loan will add $1.3 billion.

 

By Henryson Okrah|Myxyzonline.com

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