'Don't lock GH¢60 billion out of the economy' - Oppong Nkrumah cautions government

A former Minister of Works and Housing and Member of Parliament for Ofoase Ayirebi, Kojo Oppong Nkrumah, has cautioned that the government’s current monetary tightening approach could have serious consequences for production and employment.

According to him, the administration’s recent sterilisation policy, which has led to the withdrawal of about GH¢60 billion from circulation, risks stifling private-sector operations and slowing economic growth.

Oppong Nkrumah noted that while the measure may temporarily ease inflationary pressures, its prolonged implementation could drain liquidity from the economy and undermine investment.

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“They have taken about GH¢60 billion out of the system and placed it at the Bank of Ghana. That money is now unavailable to drive demand or support production,” he stated, as quoted by citinewsroom.com.

He acknowledged that sterilisation is a recognised part of the central bank’s monetary policy toolkit but argued that its application under the current administration has been excessive.

“You can deploy other instruments to channel liquidity into productive areas. Overusing sterilisation only deprives industries of funds that could support expansion and job creation,” he emphasised.

Oppong Nkrumah contrasted the current approach with that of the Akufo-Addo government, noting that although similar monetary strategies were adopted previously, those interventions reduced inflation from about 54% during the global cost-of-living crisis in 2020 to around 23% by 2024.

He therefore urged the government to balance its inflation-control measures with initiatives that stimulate production and support employment growth.

“The next phase of recovery should focus on boosting production and jobs. Controlling inflation alone is not enough to keep the economy healthy,” he said.

SSD/MA

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