Ghana’s rising inflation attributable to cedi depreciation, external factors – Pierre Laporte
Ghana’s 21 year high inflation rate has been attributed to the depreciation of the cedi and some external factors such as rising costs of imports.
This is according to World Bank Country Director for Ghana, Liberia, and Sierra Leone, Pierre Laporte.
Ghana’s headline inflation rate recorded an annual rate of 33.9% in August, 2022.
Government Statistician, Professor Samuel Kobina Annim attributed the rise in inflation rate to imported inflation.
Annual imported inflation rose to 35.2% in August from 33.9% in July 2022, outpacing domestic price growth for a fifth month.
The rise in imported inflation, Professor Samuel Annim, further attributed to the depreciation of the local currency (cedi).
The cedi has weakened more than 39% against the dollar this year and is the second-worst-performing currency in the world, after the Sri Lankan rupee.
Speaking in interview with TV3, Mr Laporte, addressing the issue on cedi depreciation, called for urgent steps to be taken by the managers of the economy to address the depreciation of the local currency.
“There is an urgency, Ghana needs to tackle these problems with urgency. What is happening in the few months is that inflation has gone up partly because of what is happening upside but also party because the currency has depreciated,” he said.
Speaking further in the interview, Mr Laporte averred Ghana must quicken its move to get a programme under the International Monetary Fund (IMF) to deal with the economic challenges.
Ghana is currently seeking a programme under the Fund.
The Managing Director of the IMF Kristalina Georgieva stated that a deal between Ghana and the IMF should be reached and finalized before the end of the year.
In a closed-door meeting with President Nana Addo Dankwa Akufo-Addo on Monday, September 5, on the sidelines of the Africa Adaptation Summit, in Rotterdam, Netherlands, she told him “we understand the urgency, and we will move as quickly as possible”.
Describing Ghana as a “superb country”, she reiterated the determination of the Fund to work with Government and the Ministry of Finance, and ensure that an agreement is in place before the end of the year.
On his part, President Akufo-Addo indicated to the IMF boss that a lot of work has been done by Cabinet and the Ministry of Finance, and the document to be presented by the Ghana side “is ready for the scrutiny of the IMF”.
