11 January 2013

Ghana: Single Digit Inflation and Its Political Undertone

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The Ghana Statistical Service says year on-year inflation for December 2012 is 8.8 percent. What this means is that if one bought an item at GH¢100 last year, the same item should have sold for GH¢108.8 last Christmas.

We do not think Ghanaians need any ghost to test this theory on our behalf. The cost of goods and services at the market place should speak for themselves. If the Statistical Service is right, we expect a chicken sold at GH¢100 at Christmas time in 2011 to be offered for GH¢108.8 at the Christmas we just celebrated. But was that the case last December?

Many were the heads of families who could not provide the basic necessities of life for their families during the Christmas and New Year festivities. Prices of goods and services so soared that the average Ghanaian worker could not afford the cost of goods and services.

In most markets in the capital city, chicken was being offered at GH¢30 and beyond. Last year, chicken was doing the rounds at GH¢15-GH¢20. Chicken was not the only item which price rose over and above the so-called single digit.

We are inclined to believe that like the so-called 'Better Ghana' agenda, single digit inflation has become a political tool used by the political elite of the moment to paper the crack s of failed economic policies.

There cannot be many Ghanaians out there, including those who formulate economic policies of state, who genuinely believe that inflation in Ghana is in single digit, though in official books and transactions of state, inflation has remained single digit for nearly three years.

The rise in wages of officialdom approved by the Executive gives the game away. When President John Agyekum Kufuor sat at the Castle, as Constitutional President of the Republic of Ghana, his monthly wage was just about GH¢3,000 per month.

Last June, the Executive approved a massive rise in the wages of Mahama's men and women at the Castle. If inflation is single digit, how does the Executive explain the massive rise of wages for the likes of Nii Lante Vanderpuiye, Dr. Tony Aidoo and Stanislav Dogbe at the Castle?

Before winning the Odododiodoo seat to Parliament, Nii Lante Vanderpuiye was given a fat cat wage of GH¢6,300 a month. Stan Dogbe received the same wage, while Dr. Tony Aidoo was given GH¢6,919 as reward for sharpening his acidic mouth.

What is interesting is that the ordinary Ghanaian's wage, which received roof-top advertisements following the implementation of the Single Spine Salary, rarely raised wages beyond GH¢2,000.

The Chronicle is unimpressed with the tendency to play politics with major decisions affecting the economy. If inflation was single digit, it would surely have shielded the national currency, the cedi, from a free fall.

A currency, which has lost nearly 50 percent of its value in four years, cannot, in fairness to every available economic theory, be said to have benefitted from single digit inflation for three successive years.

State authorities would do well to insulate serious economic policies from politics.

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