Dr. Richmond Atuahene, a financial analyst and banking consultant, has expressed strong skepticism about the Bank of Ghana’s projected timeline for achieving single-digit inflation. He argues that the current economic climate, characterized by persistent inflationary pressures, renders the 2026 target overly optimistic, bordering on wishful thinking. The Bank of Ghana’s Monetary Policy Committee (MPC) recently maintained the policy rate at 27% due to these pressures. Simultaneously, the Governor, Dr. Ernest Addison, announced a revision of the inflation target, pushing the anticipated achievement of single-digit inflation from the first quarter to the second quarter of 2026. This revision followed a missed inflation target for 2024, with the rate ending the year at 23.8%, significantly higher than the projected 15%.
Dr. Atuahene’s skepticism stems from what he perceives as a fundamental flaw in the Bank of Ghana’s inflation-targeting framework: its neglect of the supply-side dynamics driving inflation, particularly the critical role of food prices. He contends that unless food production becomes a national priority, inflation targets will remain elusive. He points to the heavy reliance on food imports as a major contributor to the depreciation of the Ghanaian cedi, further fueling inflation. This dependence on imports, he argues, creates a vicious cycle of currency weakness and rising prices, placing undue strain on businesses and households, especially low-income earners whose purchasing power is eroded by the escalating cost of living.
Dr. Atuahene’s critique centers on the apparent paradox of Ghana’s situation: a resource-rich nation struggling to achieve food security. He highlights the irony of importing basic foodstuffs like tomatoes, onions, and rice, despite having the capacity to cultivate them domestically. He argues that these imports drain the nation’s foreign currency reserves, weakening the cedi and exacerbating inflationary pressures. He dismisses the revised 2026 target as unrealistic, asserting that no “magic wand” exists to achieve single-digit inflation without addressing the fundamental issue of domestic food production.
The core of Dr. Atuahene’s argument rests on the imperative of achieving a consistent and reliable domestic food supply. He believes that a committed government effort can significantly reduce food inflation. He advocates for a comprehensive approach that tackles the entire agricultural value and supply chain, including improvements in preservation techniques, transportation infrastructure, and extension services to farmers. These measures, he argues, are essential to enhance food production and break the cycle of dependence on imports.
Dr. Atuahene’s analysis emphasizes the interconnectedness of various economic factors. He links the depreciation of the cedi directly to the reliance on food imports, highlighting how this weakens the currency’s value and contributes to inflationary pressures. He further connects this economic instability to the declining purchasing power of Ghanaians, particularly those with lower incomes, underscoring the social consequences of persistent inflation. His argument underscores the need for a holistic approach to economic policy, one that considers the interplay between monetary policy, agricultural policy, and the overall well-being of the population.
Dr. Atuahene’s skepticism about the Bank of Ghana’s inflation target is not merely a critique of monetary policy, but a broader commentary on the nation’s economic strategy. He calls for a paradigm shift, urging policymakers to prioritize domestic food production as a key to achieving long-term economic stability. He argues that without a fundamental change in approach, achieving low levels of inflation will remain a distant dream, with detrimental consequences for businesses and the overall well-being of Ghanaians. He concludes that achieving sustainable, single-digit inflation requires more than just monetary policy adjustments; it necessitates a comprehensive strategy that prioritizes strengthening domestic food production and addressing the structural weaknesses within the agricultural sector.
