The Agbogbomefia of the Asogli State, Togbe Afede XIV, has criticized the Bank of Ghana (BoG) for its decision to uphold a high monetary rate.
He expressed skepticism about the justifications provided by the central bank for maintaining the recent high monetary policy.
On March 25, 2024, the Monetary Policy Committee (MPC) of the Bank of Ghana opted to retain the policy rate at 29%, citing ongoing upward risks to inflation.
In response, Togbe Afede asserted that the nation’s struggle to achieve and sustain low inflation is attributable to factors on the supply side rather than the demand side.
“BOG’s ‘mopping up excess liquidity’ explanation for its high monetary policy rate is not convincing. ‘Excess liquidity’ presumes a certain optimal liquidity that has still not been defined. Secondly, supply-side rather than demand-side factors are at the root of our inability to achieve sustained low inflation.”
“Thirdly, it is difficult to persuade people to save when they are struggling to make ends meet,” Togbe Afede explained.
Togbe Afede, formerly a board member of the Central Bank of Ghana from 2003 to 2013, raised concerns about the International Monetary Fund’s (IMF) persistence with high-interest rates that have proven ineffective for Ghana over nearly two decades.
“It is surprising, therefore, that the IMF insists on these high-interest rates that have not worked for us, the reason why we are engaging them for the seventeenth (17th) time!” he pointed out in a statement.