Ghana has raised its benchmark interest rate to a record-high 22% as the country struggles to check soaring prices caused in part by Russia's invasion of Ukraine.
Ghana is also trying to boost its currency, the cedi, which saw the second-worst drop in value globally after Sri Lanka's rupee. The high cost of living sparked street protests in July and talks with the International Monetary Fund for a bail out.
The cost of food and services has more than doubled in Ghana as inflation hit 31.7% annually in July, its highest since late 2003. Consumers and businesspeople say they are being pushed out of business as the local currency continues to lose its value against the U.S. dollar.
Naa Koshie, a 45-year-old mother of five who runs a cold store business in the capital, Accra, told VOA she is losing money as prices of goods keep soaring.
The people had a lot of hopes in this government, she said, but it’s embarrassing how things keep getting worse daily.
Addressing the Methodist Church of Ghana on Thursday, President Nana Akufo-Addo said his government is not sleeping on the job.
"The ravages of the pandemic, worsened by the effects of Russia’s invasion of Ukraine, have led to spiraling freight charges, rising fuel costs, high food prices, steep inflationary spikes and widespread business failures. I am fully aware that these are very difficult times for us in Ghana, just as they are for most people in the world. However, the Akufo-Addo government has not thrown its hands up in despair at this pernicious development.”
The president says he is optimistic the economy will bounce back and will bring relief to Ghanaians.
"We are determined to bring relief to the Ghanaian people. Other steps will be taken, in particular, to deal with the unacceptable depreciation of the cedi. Reining in inflation, by bringing down food prices, is a major preoccupation of the government, and this season’s emerging, successful harvest will assist us achieve this objective, together with other policies.”
Courage Kingsley Martey, the senior economist with Databank Research, told VOA the measures taken by the central bank at its emergency meeting Wednesday to address the free fall of the cedi are appropriate.
"The central bank’s target is to bring inflation down and what we all want as citizens is to have low and stable inflation," Martey said. "In doing so, there are going to be short-term consequences or tradeoffs. This means individuals who would love to have access to cheaper funds or capital may not be able to do that, but that would have to be the cost we have to bear in the short term.”
Godfred Bokpin, a professor of finance at the University of Ghana, urged Akufo-Addo to reduce the size of his government as a further cut on spending.
"Time is not on our side. The government needs to reduce the size of government drastically and also as a signal and be able to have greater control over expenditure from that side," Bokpin said.
Time is running out for the government as Ghanaians continue to wait with bated breath, hoping for a major economic turnaround ahead of a hike in utility prices taking effect on September 1.