The Paramount Chief of Asogli State, Togbe Afede XIV, has blasted government for jubilations over the 26.4% inflation rate for the month of November.
According to him, it is an obvious sign of mediocrity on the part of the managers of the Ghanaian economy to be soo excited about such high figure.
Stating in his latest article “BOG Has Failed Us”, Togbe Afede who is an economist and well established business mogul noted that “It was interesting to hear Bank of Ghana (BOG) officials pat themselves on the back because year-on-year inflation had dropped to 26.4% in November 2023, from 35.2% in October 2023 and 54.1% in December 2022”.
”This trend should have been expected, I thought, because of the massive price increases and exchange rate depreciation that were recorded during the corresponding periods in 2022. It is a fallacy of year-on-year inflation numbers – they tend to be influenced a lot by what happened one year ago. That is why year-on-year inflation may rise in a particular month even when the general price level has fallen in that month, and vice versa”, he further added.
He also expressed his anger at the Central Bank: “You cannot describe what happened to prices and exchange rates towards the end 2022 as “a blip” when the effects are still with us. The markets simply adjusted to the rot in the system. A return to the relatively lower inflation rates of the past does not mean prices have become lower. Year-on-year inflation rate of 26.4% in November 2023 is not worthy of celebration. Zambia and Kenya, exposed to the same global shocks, recorded 12.9% and 6.8%, respectively. And the US dollar is currently trading at more than 150% of its price (cedis) in June 2022”.
Togbe Afede finally concluded that, “But I am glad that Bank of Ghana (BOG) has finally bitten the bullet, accepting that it does not have to set its policy rate above “past inflation”. After decades of insisting that its policy rate must be fixed above year-on-year changes in the consumer price index (CPI) to ensure “positive real returns” to investors, BOG had over the past several months, following the collapse of our economy, kept their policy rate below the year-on-year changes in the CPI. Maybe it was the case that they just could not set the policy rate above the recent hyperinflation rates”.
