Ofaose Ayirebi Lawmaker, Kojo Oppong Nkrumah has pointed out that last year the Bank of Ghana (BoG) mopped out about 62 Billion Cedis from the system and kept that at the central bank.
This meant that there was not enough cash in the system to allow consumers to make demands, he said.
Once demand is low, he added, inflation will drop, but that is a defective way of controlling inflation.
Addressing a gathering on Thursday, March 19, he stated that the government’s mention of achieving the economic numbers should be questioned.
“We have always insisted that the methods this administration is using to achieve the numbers that they are publishing should be interrogated.
“It is not enough for your child to go out and come home with a brand new car, and you are happy, you need to examine the method with which the child brought that car and ask yourself, is it sustainable or an appropriate method.
“So, take inflation, we have consistently said that the method they are using to bring inflation down is sterilisation,” he said.
He added “What sterilisation means is that, they mop up money from the system because if people don’t have money in their pockets, they can’t exercise effective demand, and if they can’t demand, prices will either stay where they are, or you, the seller at a point will decide to reduce your prices and get rid of the stock.
“In 2025, they sterilised about 62 billion Cedis from the economy, they mopped it up and literally packed it at the central bank, it has never happened before in our history.
“It is what they call the shock approach to achieve that [inflation] number of 3.3%. That is what the Governor is now saying that the mop-up exercise has cost him about 17 billion Cedis to bring it down to 3.3%.
“That is to remove money from the system, it hasn’t dealt with the cost of production, because electricity is going up, labour is going up, other inputs, fees and charges.”
Source:Fiilafmonline/3News
