BoG and Inflation: NPP’s Akosua Manu’s claim completely false

On October 5, 2023, the Deputy Chief Executive Officer (CEO) of the National Youth Authority (NYA), Akosua Manu, claimed that the Bank of Ghana’s decisions do not affect food inflation in the country.

She said this when she appeared as a panelist on TV3’s New Day programme following the opposition New Democratic Congress’ (NDC) #OccupyBoGProtest.

Fact-Check Ghana has verified this claim and presents the verdict below.

Claim: “If you are talking about some of the factors that affect inflation, including food, it’s not BOG that plants maize or plantain to determine that. It doesn’t come to them.”

Verdict: Completely False

Explanation: The Bank of Ghana’s (BoG) policies influence key macroeconomic indicators including the rate of inflation in the country. Indeed, the BoG’s monetary policy has over the years aimed at price stability in the form of achieving some targeted inflation rate.
Section 3(1) of the Bank of Ghana Act, 2002(Act 612), states that the primary objective of the Bank is to maintain stability in the general level of prices. The prices mentioned include food inflation.

For instance, the BoG’s current monetary policy aims at achieving a medium-term inflation rate of 8 percent with a symmetric band of ±2 percent. This is contained in the July 2023 Monetary Policy Report.

“The primary objective of the Bank of Ghana is to pursue sound monetary policies aimed at price stability and creating an enabling environment for sustainable economic growth. Price stability, in this context, is defined as a medium-term inflation target of 8±2 percent. This implies that headline inflation should be aligned within the medium-term target band for the economy to grow at its full potential without excessive inflationary pressures,” the report stated.

The July 2023 Monetary Policy Report further indicated that pressures on food prices are “moderated by relative exchange rate stability, stable ex-pump petroleum prices, and the tight monetary policy stance that is supported by effective liquidity management by the Bank of Ghana.”

Also, paragraph 26 of the most recent press release of the BoG’s Monetary Policy Committee issued on September 25, 2023 states:

“On inflation dynamics, the continued maintenance of a tight monetary policy stance and relative exchange rate stability have contributed significantly to the disinflation process observed in the year thus far. Headline inflation has declined by a cumulative 14.0 percent since the peak of 54.1 percent recorded in December 2022.”

Thus, even though the Bank of Ghana may not plant crops, its monetary policy affects the general stability of prices in the country including both food and non-food items.

It is, therefore, completely false for Akosua Manu to state that the Bank of Ghana’s activities do not affect food inflation.

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