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Inflation targeting is ineffective in addressing Ghana’s challenges, says Ofosu-Dorte
Inflation targeting, a popular monetary policy tool, has been heavily criticised by David Ofosu-Dorte, a senior partner at AB & David Africa, for its inability to addressing Ghana’s persistent inflationary challenges. Ofosu-Dorte expressed strong reservations about the applicability of this strategy in the Ghanaian context, arguing that it fails to stabilise the economy, particularly under … The post Inflation targeting is ineffective in addressing Ghana’s challenges, says Ofosu-Dorte appeared first on Asaase Radio.
Inflation targeting, a popular monetary policy tool, has been heavily criticised by David Ofosu-Dorte, a senior partner at AB & David Africa, for its inability to addressing Ghana’s persistent inflationary challenges.
Ofosu-Dorte expressed strong reservations about the applicability of this strategy in the Ghanaian context, arguing that it fails to stabilise the economy, particularly under high-interest rate conditions.
He was speaking at the 13th Ghana Economic Forum on Thursday (8 August), on the theme ” Unlocking Opportunities: Re-engineering Ghana’s Economic Model for Sustainable Development,”
“An economy which has 20% or more interest rates cannot be, as it were, stabilised with monetary policy,” Ofosu-Dorte stated, questioning the validity of inflation targeting in such an environment.
He challenged economists both within and outside the forum to demonstrate how inflation targeting has successfully resolved Ghana‘s inflation issues.
Ofosu-Dorte criticised the assumption that anti-inflationary measures effective in Western economies could be directly applied to Ghana.
He argued that this approach overlooks fundamental differences in economic structures and priorities. “The biggest mistake we make is that we assume that anti-inflationary measures in the West, which lead to reducing inflation through monetary policy increases, will work here,” he explained.
He emphasised that economic policies should be adapted to local conditions, rather than simply imported from foreign contexts.
According to Ofosu-Dorte, the underlying issue is a misunderstanding of the relationship between economics and human activity.
“People work, and that is why there is economics. It is not because of economics that people work. We are residents,” he remarked, underscoring the need for economic policies that prioritise the well-being and realities of the Ghanaian populace.
Reporting by Caleb Ahinakwah in Accra
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The post Inflation targeting is ineffective in addressing Ghana’s challenges, says Ofosu-Dorte appeared first on Asaase Radio.
