A former deputy Minister of Finance, Mrs Mona Quartey, has said that the purchasing power of Ghanaians has been curtailed thereby reducing the economic activity needed to spur growth in the country.
She said the government is excessively targeting lower inflation thereby preventing the public from spending on goods and services to boost the economy.
The government has touted its ability to reduce inflation to the barest minimum in the recent 2020 budget presented by Finance Minister Ken Ofori-Atta to Parliament. The recent rebasing in August 2018 has resulted in an inflation of 7.6% for the month of September.
The Monetary Policy Rate was 25 per cent when the New Patriotic Party (NPP) government took office in January 2017 and managed to reduce it considerably and held it for four consecutive times at 16 per cent with the expectation of a lower interest rate to increase liquidity.
However, Mrs Quartey feels the Akufo-Addo-led government has not done enough, insisting: “We keep on talking about this single-digit inflation rate. It is good in terms of macroeconomic statistics but really how does that translate on the ground?... What it does tell us is that the economy, in real terms, is not growing”.
She continued: “If you go to the market today, you will find a lot of goods, in fact, let me even add services because I hear a lot of consultants, businessmen, advisors and so forth crying that even when they offer their services customers are not able to pay”.
She observed that: “Market women are crying out. They have brought goods into the country. Whether from the farmyard or imported from abroad [but] they are not able to sell”.
Her explanation is that “there is no liquidity” and “people don’t have any money to be able to purchase”.
In her opinion, even though the rate of inflation has been reduced and the country has met the fiscal deficit targets and there are positive macroeconomic indicators, “in fact, the people of Ghana are not able to do the things they want to do. Their purchasing power has come down not because perhaps the value of the cedi has deteriorated significantly, but because there is just no liquidity”.