Adoa News Adoa News
Ghana’s former Bank of Ghana Director of Research, Dr. Philip Abradu-Otoo, has described the country’s inflation performance as favourable, cautioning against direct comparisons with other African economies without considering differences in monetary policy and exchange-rate systems.
His comments come as Ghana’s inflation rate increased to 5.2% in September 2026. Despite the slight rise, Dr. Abradu-Otoo believes the country’s inflation figures should be assessed within the context of its inflation-targeting framework, which uses interest rates as the primary instrument for managing price increases.
According to him, some countries in sub-Saharan Africa, including Ghana’s neighbours in the West African sub-region, operate currency arrangements that peg their currencies to the euro. He noted that the relative stability of the European currency can help keep inflation figures in those economies comparatively low.
“We have an inflation-targeting framework of monetary policy, and we use the interest rate tool as the main tool to control inflation,” he explained.
He added that several countries in the sub-region adopt a different approach by linking their currencies to the euro, which he described as a stable currency that influences their inflation outcomes.
“So their currencies have been pegged to the euro. The euro is a stable currency, and therefore it feeds into their inflation numbers as very low inflation,” he said.
Dr. Abradu-Otoo made these remarks at the launch of the Institute of Statistical, Social and Economic Research’s (ISSER) State of the Ghanaian Economy Report 2025.
He maintained that, notwithstanding the increase in inflation to 5.2% in September, Ghana’s recent performance reflects an improvement and remains within what he considers a favourable range.
“By and large, our inflation numbers are in very good territory, and we should be happy about that,” he stated.
Gold Export Disruptions Affected International Reserves
Beyond inflation, Dr. Abradu-Otoo also addressed concerns over the recent decline in Ghana’s international reserves, attributing the development partly to disruptions in gold exports amid the Middle East crisis.
He explained that interruptions to gold exports during the first seven months of the year constrained the accumulation of foreign reserves. This, he said, required the central bank to rely on existing reserve holdings to support trade and broader economic activity.
However, he indicated that gold exports resumed in September, raising expectations that foreign-exchange inflows would improve in the coming months.
Dr. Abradu-Otoo expressed optimism that the renewed export activity would support reserve accumulation and help restore the country’s international reserves to normal levels by the end of the year.
Exchange-Rate Movements Behind Increase in Debt Figures
The former central bank research director also offered an explanation for the marginal increase in Ghana’s debt figures, arguing that exchange-rate movements, rather than new government borrowing, were responsible for the change.
He pointed to a reported 10.8% depreciation in the exchange rate since the beginning of the year, suggesting that currency movements had contributed to the increase in the recorded debt figures.
His comments highlight the role of exchange-rate developments in shaping Ghana’s economic indicators, alongside monetary policy decisions, export performance and the management of international reserves.