By Godwill Arthur-Mensah/Elsie Appiah-Osei
Accra, Feb 12, GNA – Dr Stephen Amoah, the Member of Parliament for Nhyiaeso, said the Bank of Ghana’s (BoG) strategic technique of adopting inflation-targeted monetary policy has not yielded the expected results.
The move, he said, had rather seen a strategic drift resulting in increased inflationary rates.
Monetary policy is simply about decision made by Central Banks on the money supply and interest rates. Normally, policy rates are determined to optimise the amount of money in circulation.
In a statement read on the Floor of Parliament on Tuesday, February 11, Dr Amoah observed that under the inflationary targeted monetary policy, most often, the policy rates were increased to reduce inflation with the intention of stabilising the economy.
However, the opposite had been the case, with the increase in the policy rates rather increasing inflation most of the time.
“Mr Speaker, policy rate increased from 12.92% in 2011 to 25% in 2016 with their respective inflationary rates increasing from 8.73% to 17.51%.
“Policy rate decreased from 22.5% in 2017 to 16.00% in 2019 with their corresponding inflationary rates of 12.38% to 7.17% GDP growth reduced from 13.90% to 3.4% in the same period.”
The legislator noted that between 2021 and 2023, GDP reduced from 5.10% to 2 90%. The policy rates in 2020, 2021, 2022 and 2023 were 14.75%, 14.00%, 20.21%, and 29.50% and inflationary rates were 9.94%, 9.96%, 31.49% and 40.28% respectively.
Dr Amoah, a former Deputy minister of Trade and Industry, said the policy anomaly must be checked by the relevant stakeholders to stop the dysfunctional contribution to the country’s unstable economic performance.
It erodes the purchasing power of Ghanaians, increases the cost of doing business and lowers the standard of living, he noted.
The legislator proposed that a Committee should be set up by the Finance Committee, Economy and Development Committee and Budget Committee to engage the Bank of Ghana and possibly the Finance Ministry in these important policy direction.
“We need to remedy these fundamental anomalies to enable us build a resilient economy for the purpose of attaining the needed long-term economic growth and stability,” Dr Amoah stated.
GNA