A national communications team member for the National Democratic Congress (NDC), Godwin Edudzi Tamakloe, says the current inflation rate is a mismatch to the prices of goods and services.
According to the legal practitioner, citizens ought to see a reflection on the prices of goods and services whenever the inflation rate drops but that isn’t the situation currently.
“But you see, ordinarily, we should be excited if the numbers are showing that the rate of inflation shows a steep decline, but if you study the trends, you will notice that the fact that it has moved from 51% to now 45% does not in and of itself translates in a reduction in prices of goods and services,” he argued.
He noted that several factors amounted to the pricing done on the market which is a cause for price increment amidst a low inflation rate.
“You may have a situation where you can see that inflationary trend, but our market folks, the people who provide services have other things they factor into the price formulation. And so, immediately you would not see that the impact of these reductions in inflation.
He stressed that the high cost of transport and charges from several stop points had seen accrued prices from goods and services.
“The transport owners, the people who transport these tomatoes, onions even goats from Burkina to Accra, each of the barriers or police barriers, they pay. At the end of the day, they translate all of them into the pricing of this product. So you can see a situation where the inflationary rate may be going down but the price and actual pricing of goods and services in the country will not see that correspondent for in the price of goods and services.”
He further observed that Ghana’s production does not match up with the Bank of Ghana’s annual money printed into the system.
He described the situation as causing anxiety to the market.
“If you have a situation whereby the year 2021, the Bank of Ghana has done 43 billion into the system. And by the 2022, they have done close to 50 billion. Which Bloomberg actually computed and put out there, and said it was creating anxiety within the market. Now when you have this kind of situation, you need to have corresponding productivity. Because when the Bank of Ghana put this money into system, it becomes part of people disposable income.”
Edudzi Tamakloe accused Ghanaians of spending rather than saving and attributed it to the resultant effect recorded on the market today.
“We do know that the basics will tell you that a typical Ghanaian has a higher marginal propensity to consume than the marginal propensity to save. So once the money gets into the hands of a typical Ghanaian, he would want to spend. We have a greater spending culture than saving culture.”
Mr. Tamakloe, however, blamed the BOG’s contribution to the current situation given the amount of money it has circulated in competition with the fewest goods on the market, a situation he indicated flouted the Bank of Ghana’s Act.
“And so, even the Bank of Ghana’s own reckless conduct, a clear violation of its own act in printing more money into the system is a fundamentally accounting for the inflationary trend that we are seeing.”
By Leonora Enyonam Annoh | Metrotvonline.com | Ghana
