Ghana’s inflation rate has dropped significantly to 45% in March 2023, according to data released by the Ghana Statistical Service (GSS). However, Professor Godfred Bokpin, a finance lecturer at the University of Ghana Business School, has stated that this rate is still high compared to world standards and that the country is not out of the woods yet.
Inflation is a measure of the rate at which the general level of prices for goods and services is rising, and a high rate of inflation can have negative effects on an economy, such as eroding purchasing power and discouraging investment. Ghana has been grappling with high inflation for some time, and the recent drop to 45% has been seen as a positive development.
However, Professor Bokpin cautioned that this rate is still very high compared to the regional and sub-Saharan African averages. He noted that while the rate of increase in prices may be slowing, the fact that inflation remains at 45% indicates that there is still work to be done to stabilise the economy.
Despite this, the finance lecturer expressed hope that the exchange rate and fuel prices would stabilise in the coming months, which could lead to a bigger drop in inflation. He also emphasised the need to address supply-side constraints to improve transportation mechanisms and reduce the gap between urban and rural areas in terms of access to food.
The high rate of inflation in Ghana has been attributed to various factors, including supply chain disruptions caused by the COVID-19 pandemic, high energy costs, and a weakening currency. The government has implemented various measures to address these issues, such as increasing the supply of foreign currency and supporting local agriculture to reduce dependence on imports.
Inflation is a complex issue that requires a multifaceted approach to address, and Professor Bokpin’s comments serve as a reminder that while progress has been made, there is still a long way to go. With continued efforts to stabilise the economy and address underlying issues, Ghana can work towards a more sustainable future.