A former deputy Minister for Finance George Kweku Ricketts Hagan says the country may be driven into recession by the solutions being rolled out by the Nana Addo Dankwa Akufo Addo government to tackle the worsening economic conditions.
The former deputy minister was responding to the measures rolled out by the Bank of Ghana to curtail rising inflation and curtail the depreciation of the cedi.
Inflation has risen to 31.7% whiles the cedi currently trades at over ¢10 for $1.
To curb the challenge of rising inflation, the Dr. Ernest Addison led Central Bank has resorted to increasing the policy rate to 22 percent and raising the primary reserve from 12% to 15%.
The two measures are aimed at absorbing excess liquidity from the system.
Speaking to Sena Nombo on the Gold Morning Conversation, Kweku George Ricketts Hagan said the Central Bank’s involvement exposes the fact that government does not understand the challenges of the economy.
He said the Central Bank had no business intervening to address the current challenges of the economy as the causes of the problems are the preserve of the Ministry of Finance.
The Cape Coast South MP says the Central Bank’s interventions would be appropriate if the inflation was a demand push inflation driven by excess liquidity.
Mr. Ricketts Hagan said Ghana’s inflation was cost push driven thus the BoG’s measures would prove counterproductive and would only worsen the situation.
He urged the Finance Minister to act before the situation gets out of hand.
Source: Radiogoldlive.com
