Economist Dr. Peter Terkper has attributed Ghana’s rising inflation and cost of living to the government’s economic direction.
Noting that food inflation and high prices of locally produced goods are key drivers.
He explained that with lower imported inflation, the country’s import-driven economy faces continued challenges as businesses struggle and the cost of living remains high.
Dr. Tekper called for a focus on industrialisation and support for small businesses whilst advocating for the removal of the E-levy, COVID-19 and the emission levy to reduce local costs, stimulate economic expansion and create a more conducive environment for business growth.
“Inflation and high cost of living is as a result of government’s direction, what government is focusing on. If you notice, the November inflation was up because food inflation was high, and then inflation on locally produced items is also high. And you have imported inflation rule. So if you have imported inflation lower than locally produced goods, then what it means is that it is better for people to import more than to produce locally. And when you are an import-driven economy, then inflation, depreciation of the currency will not see that problem going away,”
“Cost of living will continue to be high because people will always have to import items, and then those who are producing the economy, their businesses will continue to go down. And so what is important is to look at what to do to reduce the import by promoting industrialization, strengthening small businesses because the economy is really being run by small businesses. And so economy is really being run by small businesses. And so why do we make sure that we reduce the cost? And that is one of the reason why they said they’ll remove the e-levy, and they will remove the emission levy, the COVID levy, because all these costs are impacting on the local economy.
And so when these things are done, it will help to boost and expand the economy. When the economy is expanding, then it means that your denominator, which is the GDP, will also increase. And when it increases, then it will open up for other people to also turn out businesses. And that is how you have to revive the economy to make it lively for businesses to operate,” Dr. Terkper continued.
