Togbe Afede XIV has criticized the Bank of Ghana (BoG) for celebrating a decrease in inflation to 26.4% in November 2023, from a high of 54.1% in December 2022, without acknowledging the underlying economic distress that persists. He argues that such inflation rates, though lower, should not warrant celebration, especially when compared to lower rates in Zambia and Kenya, and given the cedi’s significant depreciation against the dollar.
Afede highlights the BoG’s recent admission of not needing to set its policy rate above past inflation as a departure from its long-held stance. He reflects on Ghana’s economic challenges, including its significant debt, which has made it Africa’s most indebted country without corresponding socio-economic infrastructure development. This, he says, is a result of poor leadership, bad fiscal and monetary policies, and a disregard for the country’s potential.
He points out the irony in the BoG’s current financial struggle, including a massive loss and negative net worth reported in 2022, after it had previously enforced stringent measures on local financial institutions for mismanagement. Afede criticizes the BoG’s excessive operational costs and high staff remuneration, calling out the lack of scrutiny on the bank’s monetary policies that have contributed to economic hardship.
The article also touches on the adverse effects of high interest rates on the economy, including stifling growth, increasing the cost of living, and exacerbating currency depreciation. Afede argues that the BoG’s approach has failed to address inflation effectively and has hurt Ghana’s standing in international financial markets, making borrowing more costly.
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In conclusion, Afede calls for a reevaluation of the BoG’s mandate and governance, suggesting a separation of the roles of Governor and Chairman to enhance checks and balances. He emphasizes the need for policies that focus on growth and employment generation, rather than solely on price stability, to turn around Ghana’s fortunes and fulfill the aspirations of its founding fathers.
