Ghana this week raised its policy rate by 200 basis points to 19% in a bid to rein in spiralling prices. Consumer price inflation in April reached an 18-year high of 23.6%. Central bank governor Ernest Addison has described the inflation rate as “baffling”.
The monetary policy rate “appears not to be effective in easing inflationary pressure,” Dzansi says. That does not mean it was wrong to raise rates, as the situation would otherwise be worse, he says. But higher rates usually work when inflation is caused by demand, whereas a larger part of the problem now comes from the supply side, he adds.
International prices for agricultural commodities such as wheat, sunflower oil and corn increased by 30%, 67% and 21% respectively between January and March, according to Moody’s. Russia and Belarus are among the largest exporters of fertilizers, and sanctions against them are likely to weigh on
There's more to this story
Get unlimited access to our exclusive journalism and features today. Our award-winning team of correspondents and editors report from over 54 African countries, from Cape Town to Cairo, from Abidjan to Abuja to Addis Ababa. Africa. Unlocked.
cancel anytime
Already a a subscriber Sign In
