According to Steve Hanke, founder and co-director of the Institute for Applied Economics and professor of applied economics at Johns Hopkins University, Ghana’s economy is currently in free fall.
As of Sunday, October 22, 2022, he claims that the country in West Africa has an inflation rate of 11%.
The Ghana Statistical Service, or GSS, calculated the inflation rate for September as 37.2%, which is in contrast to Prof. Hanke’s estimate of inflation.
The economist reaffirmed in a tweet seen by GhanaWeb that only a currency board can help stabilize the decline of the Ghana cedi against the US dollar.
He pointed out that Ghana now needs a currency board in the same way as the then-Gold Coast did from 1913 to 1958, or else a debt default will soon occur.
“Ghana’s economy is in a free fall thanks to President Akufo-Addo. I currently estimate Ghana’s inflation to be a startling 109%/year. Debt default is imminent in the absence of a currency board, similar to the one the Gold Coast had (1913–1958), according to Prof. Steve Hanke’s tweet.
Dr. John Kwakye, Director of Research at the Institute of Economic Affairs, has confirmed Prof. Hanke’s claim that a currency board can stabilize the cedi (IEA).
A currency board-style monetary system, he told 3news in a report, can give the cedi long-term stability, but he cautioned that its installation must be done gradually.
I concur with Prof. Hanke that the cedi can only have long-term stability under a monetary system akin to a currency board. But we should advance in that direction gradually. It is possible to determine all the modalities.