Ghana’s high inflation driven by Government, not consumer behaviour – Harry Yamson
Chief Executive Officer (CEO) of Ishmael Yamson & Associates, Harry Yamson, has blamed the Government for the country’s high rate of inflation.
According to Mr Yamson, inflation contrary to widely held notions of it being consumer-driven, it is rather being driven by the Government through its big spending.
“Inflation in Ghana is not driven by consumer behaviour but rather by Government action (expenditure). So from the Government side, a lot of work needs to be done to bring inflation down.
“Doing so will help bring interest rates down and also help deal with the depreciation of the cedi,” he remarked speaking during the NorvanReports and Ishmael Yamson & Associates X Space Discussion on the topic, “Harnessing the Power of Local for Global Success: Exports from Ghana.”
Increased spending by Governments heightens the risk of increased inflation rates in countries.
The Government for this year, has planned to spend some GHS 206bn in expenditure.
Speaking further, Mr Yamson quipped Ghana’s high inflation is affecting the ability of businesses to price and value exports given its impact on the depreciation of the cedi.
“Inflation is a major contributing factor to cedi depreciation, most of the countries we are exporting to have inflation between 2-8%. But ours is high and it is disturbing the ability of exporters to price and value their products,” he posited.
Ghana’s monthly inflation rate soared to a 10-month high in May, as a sharp slump in the cedi led to a surge in the cost of non-food items.
The annual inflation rate fell to 23.1% from 25% in April due to favorable base effects.
According to Bloomberg, since the start of the year, the cedi has depreciated by 20 percent against the US dollar, making it the fourth worst-performing currency globally, after the Egyptian pound, Nigerian naira, and Lebanese pound.
