IEA holds roundtable on inflation management in Ghana
IMF officials conclude visit to Ghana
The Institute of Economic Affair (IEA) has called on government to adopt what it says is a hybrid approach in dealing with the increasing inflation rate in the country in the long term.
According to Director of Research at the Institute, Dr John Kwakye, this approach will entail the combination of an inflation targeting approach - to focus on headline inflation.
He suggested a second approach, which will directly target key components driving up the cost of items that impact consumer price inflation.
Addressing participants at a roundtable discussion on inflation management in Accra, Dr. Kwakye called on government “to cushion pump prices, including from its windfall earnings from higher oil prices, the Energy Sector Stabilisation Levy Act (ESLA) fund, or reduction of some of the taxes and levies”.
He further advised government to collaborate with the Bank of Ghana in addressing the effects of major drivers that stoke inflation figures – food, transportation and fuel costs.
“Mitigating the current inflation calls for interventions in respect of food and fuel, especially. For food, it is necessary to augment supply, including accessing the ECOWAS strategic stock, importing some food items and banning the exportation of essential items,” Dr. Kwakye explained.
“Government must consider providing a temporary subsidy on staples like maize, rice and bread to ease the burden on low-income consumers. Even the IMF, which is known not to be a fan of subsidies, has called on governments to provide food subsidies to their citizens,” he added.
Meanwhile, the Ghana Statistical Service on July 13 announced that June this year witnessed another surge in inflation reaching 29.8 percent.
The service explained the rise was mainly driven by transportation costs which include fuel prices, which registered a hike of 41.6 percent for the period.
MA/FNOQ
