Some think the oil curse is catching up with the ‘new kid’ on the block – Ghana as some of its vital economic indicators are beginning to looking pale. It’s inflation rate which is already in the double digit bracket rose further to 11.8 percent in July from 11.6 percent in June.
Also, it’s currency has weaken in recent times, thereby contributing to imported inflation.
Bismarck Rewane, chief executive of Financial Derivatives CompNy (FDC) said increasing cost clothing and transportation is also responsible for the increase in inflation.
Ghana’s economy was relatively better before the discover of crude oil. Rewane is afraid that the inflation may rise further with government favouring the idea of removing fuel subsidy completely. He said this will push Consumer Price Index (CPI) beyond 8.9 percent target of the Bank of Ghana.
It is however expected that deficit will reduce sharply and reduce inflation.
Cedi weakened by 11.6 percent against the dollar Year-to-Day (YTD)
The cedi is one of the worst performing currency after the South African rand and Kenyan Shilling.
Ghana’s benchmark interest rate is high than Nigeria’s at 16 percent per annum.