By Enyichukwu Enemanna
Ghana’s inflation remains uncomfortably high and will require a balanced monetary policy, newly appointed governor of the West African country’s central bank, Johnson Asiama, said on Monday.
“While inflation is easing, it remains uncomfortably high … and progress has been slow,” Asiama said at an event ahead of his first monetary policy meeting.
“Our task over the next few days is … to reach a policy stance that reinforces the disinflation path without undermining the recovery or destabilising market expectations,” said Asiama, who is targeting 8% price inflation.
In December 2022, the country’s consumer price inflation stood at 54% before President John Dramani Mahama, who came to power in January, brought it down from its peak to 23.1% in February. However, the central bank chief believes more should be done to hit his target of 8%, with a margin of error of 2% points.
The West African gold and cocoa producer opted for debt restructuring after defaulting on an IMF repayment in 2022.
The bank’s Monetary Policy Committee is due to announce its next rate decision on 28 March.
Finance Minister Cassiel Ato Forson said during his budget speech this month that steep spending cuts would allow Ghana to drive down inflation to 11.9% by the end of the year.
Asiama, however, sounded a note of caution. He said gold exports and remittances had contributed to a trade surplus and reserve build-up, but global tariffs, geopolitical tensions, and weakening Chinese demand presented risks.
He added that it was unclear whether current fiscal measures would be sufficient to satisfy the International Monetary Fund’s reviews of its three-year lending programme with Ghana, the next of which is expected in April.
Mahama, sworn in this January, pledged to overcome public discontent by boosting the economy and creating much-needed jobs.
He inherited an economy emerging from its worst economic crisis in a generation, with turmoil in the vital cocoa and gold industries.
