Ghana’s True Inflation Rate Is 45.63% …US Economics Professor Reveals

Professor of Applied Economics at the John Hopkins University, Baltimore, Maryland USA, Prof. Steve Hanke, has revealed that his measurement of inflation in Ghana shows the rate is a heart-sinking 45.63% and not the 23% that was recently recorded officially.

Prof. Hanke who is also the founder of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at the Johns Hopkins University in Baltimore, described the situation as a crisis as it is coupled with high-interest rates that have soared to 17%.

“Today, I measured inflation in Ghana at a stunning 45.63%/yr. With a debt crisis looming on the horizon, Ghana’s interest rates have soared to 17%,” he tweeted.

He added that the local currency, the cedi, has basically now become junk. “The cedi is central bank junk and investors are losing confidence.”

This confirms earlier reports that the Akufo Addo administration is finding tough time sourcing funds internationally due to its extreme debt levels and damaging credit ratings by all the international rating agencies.

Prof. Hanke is also the director of the Troubled Currencies Project at the Cato Institute and a senior fellow at Cato’s Center for Monetary and Financial Alternatives and thus his international perspective is pretty much veritable.

Interestingly, his assessment of inflation is contrary to claims by the Bank of Ghana and the Ghana Statistical Service (GSS). According to these two local institutions, inflation in Ghana as of April 2022, is 23.6%

Meanwhile, the cedi has already depreciated massively against major trading currencies, especially the US dollar while the country’s debt stock has ballooned to a humongous Ghc391billion.

The Akufo-Addo government has claimed that COVID-19 and the Russian-Ukrainian war is responsible for the mess, but the World Bank country office in Ghana has said those claims are inaccurate as the economy had already begun a downward spiral even before the onset of COVID-19.

Also, the Russian Embassy in Ghana has told the government to stop blaming it for its economic woes as the country’s economy had already become trouble before the invasion of Ukraine.

Meanwhile, many analysts point out that the country’s debt conundrum is due to reckless borrowing by the Akufo-Addo government which is driven by pure corruption.

Finance Minister, Ken Ofori-Atta and Minister of State in charge of Finance, Charles Adu Boahen, have in what can be described as a textbook example of conflict of interest, contracted their private companies, Databank Financial Services and Black Shield Brokerage respectively as so-called bond market experts to advise on borrowing so that anytime the Finance Ministry borrowed, their companies got paid juicy fees.

Because of the sweetheart arrangement, Ofori-Atta styled himself into a Minister of borrowing, heaping on public debt endlessly in what ultimately benefits him personally.