Ghana’s quest to encourage the culture of savings and investment will yield no positive outcomes if proper and drastic measures are not taken to tackle the high levels of inflation, this is the standpoint of banking consultant and financial analyst, Dr. Richmond Atuahene.
The finance analyst says a high level of inflation is an enemy to investment, and hence no significant investment in any form can take place in an economy where inflation “flourishes”.
Dr. Atuahene, in his submission at the 2025 Money Summit, asserted that high inflation renders both traditional and alternative investments worthless and discourages people and institutions from investing.
Economists and Finance experts explain that high inflation reduces the real value of money over time. This means the returns investors earn are quickly eaten up by rising prices. For instance, if you invest in a bond or savings account that gives a 15% return, but inflation is 25%, your actual earnings are negative, which means you’re effectively losing money.
This discourages people from saving or going into long-term investments because the future value of the returns becomes uncertain or inadequate. As a result, both individuals and businesses are less likely to invest, slowing economic growth and development.
Unfortunately, as revealed by Dr. Atuahene, available data on inflation in Africa puts Ghana among the countries with high inflation levels. Ghana, the financial analyst says, is among the 7 countries out of 52 with an inflation rate above 20%.
This situation, he describes as self-inflicted due to how badly the economy has been managed in the past, especially the BoG’s financing of the government’s fiscal deficit.
“Out of the 52 countries in Africa, 7 countries with inflation rates more than 20%, Ghana is inclusive. We as a country have a problem with inflation. But that problem is self-inflicted. If you monetise the fiscal deficit, or you decide to print more money, you cannot use this inflation targeting to stop it, because it has become endemic,” he recounted.
He added, “Inflation destroys all investment. All investments, whether it’s traditional investment whether it’s alternative investment, inflation destroys them.”
While applauding the efforts taken by the current government to deal with the situation, Dr. Atuahene was quick to add that the country is not out of the woods yet. While Ghana has projected an end-of-year inflation of 11.9%, the World Bank believes the country will rather end the year with a higher rate of over 17%.
To make investment attractive, he is calling for bold and pragmatic steps to solve the inflation problem of the country.
“We need to devise new ways of stopping it. Bank of Ghana, the Ministry of Finance must work assiduously, seriously to address this inflation. Let us be very pragmatic. Let us be bold and speak the truth, so that we can all stop this. The good thing about what I’ve seen is that, for the fiscal deficit, an attempt is being made to address it,” he remarked.
The financial analyst says that without controlled inflationary pressures, confidence will erode, capital will flee, and growth will stall since people will not have the appetite to invest.
