Dr. Cassiel Ato Forson, a ranking member of the Support Committee of the House of Representatives, has advised the government against creating money to finance its spending.
According to him, the government’s efforts to combat inflation are harmed by the practice, also known as monetary funding.
He highlighted that the Bank of Ghana should prioritize the fight against inflation while delivering a public lecture titled “Building the Ghana we desire.”
In his opinion, “The first objective should be to reduce inflation because Ghana does not want it to get entrenched. We must do this before it is too late.
Inflation expectations need to be immediately anchored by the Bank of Ghana.
To finance government spending, they ought to stop producing money, also referred to as “monetary financing.””
Ato Forson charged the Bank of Ghana to institute an emergency monetary policy committee to consider hiking the monetary policy rate as a signal for investor confidence.
“To stem the rapid depreciation of our cedi, the Bank of Ghana may have to call for an emergency monetary policy committee meeting and consider the need to hike the monetary policy rate, even if it is for purposes of signalling that somebody is in charge,” he said.
“Government must prioritise and rationalise expenditure by cutting all unnecessary and frivolous expenditures, whiles considering the extension of support to the poor and the vulnerable in the country, “since the economic hardship is affecting them the most,” he added.