Inflation rose to 27.6 percent in May from the 23.6 percent recorded in April 2022. Official figures from the Ghana Statistical Service (GSS) for the period show that 56.2 percent of the products responsible for the rise in inflation are food and non-food products that were locally produced, with imported items accounting for the other 43.8percent.
To this end, Prof. Quartey is confident that beyond the merits of prudent fiscal policy, targeted support and an enhanced policy framework for the agriculture and manufacturing sectors would boost economic growth and consequently, curb inflation.
“Fiscal policy is important. We have seen some fiscal measures in the budget statement, but what I will like to see is more support for agriculture and manufacturing. Where we find ourselves tells us the need to enhance whatever support we have for the real sector through policy.
Inflation is not just a monetary issue; we also have supply-side factors and not demand-side only… As we see currently, food inflation is quite high. So we need to address the supply side factors and that is where fiscal policy comes in,” he said at the eighth edition of the UPSA Law School’s Quarterly Banking Roundtable with the theme, Monetary Policy, Central Bank Leadership, and Stability of the Cedi.
He added that though government is making an effort, fragmented solutions targeting certain areas without equal input in others would fail to address the lingering issues. He, therefore, called for the adoption of a holistic approach to addressing the problems in both sectors.
“I have seen the government put in the necessary structures to set up fertiliser factory in the country to avoid the shortfall. But we need to go beyond the fertilisers. If you look at food supply, for instance, we need more of that. And we need to support the value chain. It is not just about providing fertilisers, yes, we need fertilisers but we need to go beyond just fertilisers.
Irrigation is quite key; if you look at Burkina Faso for instance, they have gone very deep into irrigation. That is why we import so many tomatoes and other things from Burkina Faso rather than growing them locally. These are all supply-side factors,” he explained.
The economist said the recent supply chain hiccups and the fallout of the Russia-Ukraine crisis should bring food security and the necessity of the proper storage of food into sharp focus.
While some experts questioned the government’s flagship Planting for Food and Jobs (PFJ) programme as well as the One District One Factory (1D1F), on account of rising food inflation, Prof. Quartey commended efforts made so far, while suggesting that more needs to be done in that regard.
“As a country, if you look at government’s flagship programme, Planting for Food and Jobs, the One District, One Factory, they have yielded some results but I think it is about time we deepen and enhance whatever we do there,” he said.