Ghana’s inflation at a terrible 50%/year – Renowned US economist

Steve H. Hanke, a professor of applied economics at the Johns Hopkins University in Baltimore, Maryland has pegged Ghana’s inflation rate at 50%/yr, describing the status as terrible.

The 79-year-old economist, Saturday, July 9, 2022, shared footage from the Arise Ghana protest, trumpeting the high cost of living in the country.

“In #Ghana, hundreds gather in protest of surging inflation. Under Pres. Akufo-Addo’s reign, sky-high prices are the new norm. Today, I measure GHA’s inflation at a terrible 50%/yr,” the tweet of the American read.

Hanke has been vocal about global economies with Ghana not being an exception. On July 3, 2022, the international economist ranked Ghana ninth out of seventeen countries on his inflation dashboard. He measured Ghana’s inflation rate at the time at an astonishing 49 percent/year – almost two times the official inflation rate of 28 percent/year.

In #Ghana, hundreds gather in protest of surging inflation. Under Pres. Akufo-Addo’s reign, sky-high prices are the new norm. Today, I measure GHA’s inflation at a terrible 50%/yr.pic.twitter.com/frBBHss7xF

— Steve Hanke (@steve_hanke) July 9, 2022

The economist, prior to this, opined that Ghana’s decision to seek a bailout from the International Monetary Fund (IMF) will not save the economy. In a July 2 tweet, Steve Hanke questioned Ghana’s last-ditch effort to save the economy which is in distress and saddled with a huge debt burden.

“Today, I measure inflation in Ghana at a stunning 49.35%/yr. In a last-ditch effort, the government has begun negotiations with the IMF on a bailout deal. SPOILER ALERT: Another IMF loan won’t save Ghana’s economy. Like its past 17 IMF programs, a new one will fail.”

His IMF assertion was however contradicted by Joe Jackson, Chief Operations Officer at Dalex Finance. The Ghanaian financial analyst responding to Hanke’s tweet said: “I disagree with Steve Hanke. IMF programs have largely worked in Ghana. The problem has been the return to bad old habits when the program ends. ‘Don’t blame the heart surgery. You returned to a junk food diet as soon as you were out of hospital.”

I disagree with Steve Hanke.
IMF programs have largely worked in Ghana. The problem has been the return to bad old habits when the program ends.
“Don’t blame the heart surgery. You returned to a junk food diet as soon as you were out of hospital.” https://t.co/C9ewnyV2Oc pic.twitter.com/BHXJoPHaDj

— Joe Jackson (@Joe_Jackson_GH) July 3, 2022

After years of berating the John Mahama government for seeking a bailout from IMF and vowing never to do same, President Akufo-Addo and his government despite touting confidence in home-grown solutions and their unapparelled ability to manage the economy made a U-turn on July 1, 2022.

The president authorized Finance Minister, Ken Ofori-Atta to commence formal engagements with IMF to support the country’s economy. Although the government acknowledged the worsening economic condition, it has insisted that, unlike John Mahama who mismanaged the economy, there is a global crisis – a reason for backtracking.

“The domestic programme which would have enabled us to deal with it has had its own challenges. The president has asked that we open the IMF window and start engagement with the fund. Let’s give ourselves the opportunity to go through it,” Information Minister, Kojo Oppong Nkrumah argued on the Citi Breakfast Show.