Is BoG squeezing jobs to tame inflation? – Oppong Nkrumah questions policy stance

The Ranking Member of Parliament for the Economy and Development Committee, Kojo Oppong Nkrumah, has questioned whether the Bank of Ghana’s efforts to lower inflation are putting unnecessary pressure on businesses, job creation, and economic growth.

During an engagement with central bank officials, he argued that monetary policy should look beyond headline inflation and consider the difficulties facing households and businesses.

Mr Oppong Nkrumah pointed to the October 2026 inflation rate of 5.5%, below the Bank’s target range of 6% to 10%. He questioned whether pursuing inflation below that range risked keeping monetary conditions too restrictive.

He said the inflation target should support an environment conducive to growth and employment, rather than serve solely as a statistical benchmark.

A Bank of Ghana official rejected the suggestion that the central bank was deliberately pushing inflation below its target band.

The official said the Bank’s forecasts showed inflation gradually returning to 8%, plus or minus two percentage points. The Monetary Policy Committee also needed to remain alert to emerging risks.

Mr Oppong Nkrumah further questioned whether demand-reduction measures were appropriate when much of Ghana’s inflationary pressure was cost-driven.

Citing the International Monetary Fund’s latest review, he argued that production costs, utility charges and rent required attention alongside monetary policy.

He questioned whether liquidity sterilisation and other demand-management measures could constrain economic activity without directly addressing those pressures.

The MP asked whether the central bank was advising the government and relevant institutions on measures to tackle rising business and household costs.

In response, the BoG official said monetary policy is primarily a demand-management tool and cannot directly address supply-side pressures.

The official said policy decisions were guided by economic data and balanced price stability and growth.

The official also cited a reduction in the policy rate from 28% to 14% as evidence of efforts to balance inflation control with support for economic activity.

Mr Oppong Nkrumah also raised concerns about differences between national inflation and the rates recorded across regions and sectors.

Against the headline rate of 5.5%, he cited inflation of approximately 9.8% in the Ashanti Region and services inflation of about 8.3%.

He questioned whether those differences helped explain why many people continued to experience pressure from rising living costs despite the decline in national inflation.

He argued that economic indicators must be considered alongside the actual costs confronting households and businesses, particularly for essential services.