Fundamentals of Ghana’s economy stronger and better - Bawumia explains

Vice President, Dr. Mahamudu Bawumia, has described Ghana’s economy as stronger and resilient despite the crisis the world economy is going through because of COVID-19 and the Russia/Ukraine war.

Vice-President Dr Mahamudu Bawumia

Addressing Ghanaians on the state of the economy at a National TESCON Training and Orientation Conference organised by the National Youth Wing of the New Patriotic Party (NPP) in collaboration with Danquah Institute, the former deputy governor of of the Bank of Ghana said the growth of Ghana’s economy is fundamentally stronger than it was in the 2013-2016 period.

“the path of inflation in Ghana has been similar to those of other countries following the COVID pandemic. Inflation had declined from an average of 17.5% in 2016 to an average of 7.2% in 2020. Since the pandemic, inflation has increased to an average of 10% in 2021.

As of February 2022 inflation 15 rose further to 15.7% as a result of global conditions, including a rise in crude oil and other commodity prices and the Russian-Ukraine conflict. It is important to note that between 2013 and 2016 inflation averaged 15.9%. Between 2017 and 2021, however, inflation has averaged 10.4% notwithstanding the impact of COVID-19.

Dr. Bawumia further explained that interest rates are lower now than they were in the 2013 -2016 period.

Before COVID-19, the steady disinflation process provided scope for significant monetary policy easing. The Bank of Ghana’s Monetary Policy Rate (MPR) was cut by a cumulative 11% between January 2017 and January 2021.”

“This translated into a reduction in short term interest rates, with the interest rate on the 91-day Treasury bill declining from an average of 21.2% between 2013 and 2016 to an average of 13.8% between 2017 and 2021. Lending rates have also fallen from an average of 28% between 2013 and 2016 to an average of 23% between 2017 and 2021,” he said.

Bawumia added that in response to the recent increase in inflation, the Bank of Ghana has increased the policy rate by 2.5% from 14.5% to 17.0%.

Other personalities present at the event included the First Lady, Rebecca Akufo-Addo, Chief of Staff, Frema Akosua Osei Opare; National Chairman of the NPP, Freddie Blay; Executive Director, Danquah Institute, Antoinette Tseboa-Darko, among others.

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