Professor Godfred Alufar Bokpin, an economist, has urged governments to ensure that Ghana achieves an inflation rate of at least six percent annually for about 15 years.
He believes that, coupled with a stable currency, high productivity, and lower interest rates, this would enable macroeconomic gains to translate into improvements in the lives of citizens.
In an interview with the Ghana News Agency on recent economic developments in the country, Prof Bokpin said, “We’ve made some macro-level progress, but it’s yet to translate into micro, which takes time to benefit ordinary Ghanaians. Before macro-level development benefits the Ghanaian on the street, we’re looking at achieving an inflation rate of not more than six percent for not less than 15 years.”
He observed that over the years, measures by successive governments to control inflation were short-lived, a situation the economist said was not helpful for individuals and business planning and had less positive impact on Ghanaians.
“Our target should be an inflation rate of not less than six percent in 15 years; then we’ll see how interest rates come down significantly and ease restrictions on growth drivers of the economy. Then, we’ll see that things are turning around at the household level,” Prof Bokpin noted.
He described Ghana’s economy in 2023 as “enduring” for individuals and businesses because “Ghanaians had to pay a high price of going through a surgical operation with the International Monetary Fund (IMF).”
The sacrifices, he said, included higher taxes through increases to existing ones and the introduction of new ones from 2020, such as the COVID-19 levy, Electronic Transactions Levy (E-levy), and Domestic Debt Exchange Programme (DDEP), which led to a haircut on investments.
“Companies have had to lay off workers because things are hard, but the government is keeping its size. But it was a price we had to pay for a future we can all be proud of, although the approach the government adopted inflicted more pain on Ghanaians,” he said.
He stated that such sacrifices made by Ghanaians had yielded positive results, with 2023 showing some signs of stability.
The inflation rate, which was 53.6 percent in January 2023, had eased to 26.4 percent in November 2023, with the Cedi rate, which experienced some depreciation against the Dollar, going for GHS11.6 for US$1 as of November 2023.
Prof Bokpin, however, said the government must make more sacrifices going forward.
“Even in 2022 when the government said it was cutting allowances and coupons, they’ve not told us how much they’ve saved and what it’s been used for,” he noted.
The economist expressed optimism that 2024 would spur economic growth through increases in the patronage of hospitality services, mainly hotels and car rentals, due to election-related activities.
“It means that there are some related businesses and Ghanaians whose lifestyles are indexed to political activities will have their harvest season. This would inject more liquidity into the economy and bring some relief to Ghanaians,” he noted.
