Bussiness
BoG Governor confident inflation has peaked; expects rate to start declining
Governor of the Bank of Ghana, Dr. Ernest Addison, has described as baffling the sustained rise in the rate of inflation in the country.
According to the governor, the Monetary Policy Committee, which is meeting to review developments in the economy, will need to decide on the current policy rate, which stands at 17%.
The policy rate, which influences interest rates for individuals and businesses, is also used as a tool to curb inflation in the country.
Data from the Ghana Statistical Service shows that the continuous surge in transport and food prices among others, across the country, has pushed the national year-on-year inflation for April 2022 to 23.6 %, which is over 13 percentage points higher than the upper band of government’s inflation target for 2022, which is 10 %.
Under the inflation targeting regime being operated by the Central Bank, policy makers generally prefer that the policy rate stays ahead of headline inflation. But for the first time in a long while, the key rate is trailing headline inflation by about 700 basis points, leaving the Central Bank in a difficult position.
Speaking on the challenge with inflation in an interview with Bloomberg, the Governor of the Bank of Ghana, Dr. Ernest Addison, said the situation is complicated, but a decision will be made by Monday on what to do about the policy rate.
“It’s an issue, which in a sense is baffling for all of us. A year ago inflation in Ghana was 7%% and now we find ourselves with high double-digit inflation. It’s a very complicated environment. The MPC is meeting this week and I do not want to pre-empt what the committee will decide, but I think it’s a very complicated situation. We do need to take a position on what to do with the policy rate, which stands at 17%.”
Dr. Addison meanwhile, stated that he was confident that the rate of inflation had peaked and should begin declining for the rest of the year.
“Government and the Central Bank are very much aware of the problem. We’ve had very major decisions on fiscal consolidation. Expenditures have been cut by 20% among other things. We expect that these measures will serve as an anchor to inflation. A lot of the shocks that we are seeing now tend to be supply-side in nature, but we think the worst has gone through the system, and we expect that inflation will be tapering off for the rest of the year.”
Source: citibusinessnews.com
Ghana’s gold and minerals sector is set for a major spotlight as Meetings. Co, in partnership with key industry stakeholders, announces the Mining & Minerals Convention 2025, scheduled from August 26-27, 2025, at the Kempinski Hotel Gold Coast City, Accra.
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The Minister for Finance Hon. Cassiel Ato Forson has disclosed that a sum of nine hundred and Eighty-Seven Million, Nine Hundred and Sixty-Five thousand and Seventy-Three Ghana Cedis (GHS987,965,073.00) from the Consolidated Fund into the District Assembly Common Fund Account, being the first quarter amount due to the DACF.
Furthermore, the Finance Minister informed the House that a total amount of Two Billion, Thirty- Three Million, Four Hundred and Sixty-Nine Thousand, Six Hundred and Seven Ghana Cedis (GHS2,033,469,607) has been disbursed to the National Health Insurance Fund.
While the Ghana Education Trust Fund has also received a total of Two Billion, Seven and Ten Million, Two Hundred and Twenty-Seven Ghana Cedis (GHS2,710,227,947.00) for the months January, February, March and April,2025.
The Finance Minister disclosed this in his statement to Parliament on the payments to statutory funds on the floor of the House.
In addition, he cautioned that the Administrator of the District Assembly Common Fund is required to ensure that 80% of this amount is transferred directly to the Assemblies without fail and expenditure returns submitted to the Ministry of Finance before subsequent releases will be made.
He added that Members are encouraged to monitor the utilization of these amounts sent to their respective Assemblies in line with the approved guidelines by Cabinet.
In his closing remark, Ato Forson said he’s going to take the concerns of the House seriously.
For his part, the Majority Leader, Mahama Ayariga made known the President’s prioritization of women in the country stating that President Mahama is “Pro-women”.
This is due to the fact that women are going to be the core beneficiaries from the expenditures going to be made by the MMDA’s, he added.
The Minority Leader Alexander Afenyo-Markin questioned the Finance Minister why road contractors have not been paid for more than five months. He said the Minister must not be applauded for since the allocation of these funds were long overdue.
