Refusing to emit excess money in response to the shock would limit the impact of higher prices for energy and food, Hanke says. He sees few signs that African central banks are ready to follow that path.
Inflation is not a global problem, but “always and everywhere” a monetary one, Hanke says. “It isn’t caused globally, it’s caused locally. Central banks should not be emitting excess amounts of money as they have been during Covid-19.”
Countries that are following the right policies are China, Japan and Switzerland, all of which have been able to contain inflation, Hanke argues. In Africa, by contrast, central banks have followed the lead of Western central banks by increasing money supply, he says.
“Each country is following the policies of the Fed and the ECB.” The result is that inflation is increasing across the board in Africa, he says.
- The outlook for inflation and growth is
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