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.
In a tweet sighted by GhanaWeb, the economist reiterated his point that it is only a currency board that can help stabilise the depreciation of the Ghana cedi against the US dollar.
He noted that just as the then Gold Coast had a currency board between 1913 to 1958, present-day Ghana needs a currency board else debt default is just around the corner.
“Thanks to Pres. Akufo-Addo, #Ghana’s economy is in the tank. Today, I measure Ghana’s inflation at a stunning 109%/yr. Without a currency board, like the one the Gold Coast had (1913-1958), debt default is just around the corner,” Prof Steve Hanke tweeted.
Prof Hanke’s assertion that a currency board can stabilise the cedi has been reaffirmed by Dr. John Kwakye, Director of Research, Institute of Economic Affairs (IEA).
He told 3news in a report that a currency board-type monetary system can give the cedi lasting stability but warned that installing the currency board must be done progressively.
“I agree with Prof. Hanke that only a currency board-type monetary system can give the cedi lasting stability. We should, however, move progressively towards it. The full modalities can be worked out.”
Ghana’s inflation rate according to the Ghana Statistical Service has moved from 33.9 percent in August 2022 to 37.2 percent in September 2022.
This is a 2.0 percent month-on-month increase from the 33.9 percent rate recorded in August 2022.
However, the rate is also 37.2% higher than that of September 2021.
Year-on-Year inflation varied upwardly by 2.2 percentage points between August (31.7%) and September (33.9%) 2022.
Food inflation was 37.8% while non-food inflation was 36.8%.
Inflation for locally produced items was 35.8% while inflation for imported items was 40.7%.
Western Region recorded the highest food inflation (47.0%) and Eastern Region, the highest non-food inflation (42.0%). Eastern Region recorded the overall highest inflation (41.0%) followed closely by Western Region (40.2%) and Greater Accra Region (39.3%).
Transport (68.7%) recorded the highest rate of inflation in the Eastern Region, for food inflation in the Western Region, Fish and Other Seafood had the highest rate of inflation at 64.0%.