The Institute of Economic Research and Public Policy, IERPP, on Wednesday, March 5, 2025, in Accra, in a press release,questioned the rationale behind government’s functionaries celebrating the auctioning of treasury bills between 19% and 22%.
The economic and policy think tank finds it extremely strange that the government is touting such a situation as an achievement since there would be little or no value for those who would invest in these T-bills.
“This clearly portrays the lack of understanding of economics by some individuals in government. They make posts to the effect that government has auctioned T-bills for 19% and 22%, and for that matter, the Mahama government should be praised. This does not call for any jubilation. Assuming the end of year inflation target is 19%, this means a zero or -3% real value for investment” the statement reads, in part.
“Inflation currently sits around 23%, lending rate, primarily driven by the Monetary Policy Rate (MPR) sits between 34.5 and 35.5%. This implies that holding all other factors constant, the average Ghanaian who invests in T-bills given the current rate is losing money in real terms” IERPP further explained.
“That is to even assume that such people are not borrowing to invest. Should the later be the case, then the average Ghanaian investor is in for trouble. We should brace ourselves for more non-performing loans (NPR)” the release further stated.
IERPP cautioned the government against manufacturing economic indicators just to look good in the eyes of the publicas well as the international community, a situation that can affect Ghana’s credibility amongst global financial institutions like the IMF, the World Bank, etc.
“The government should desist from manufacturing economic indicators and figures to suit its agenda of looking good in the eyes of the public. The international community and financial watchdogs like the World Bank and IMF would discredit Ghana if figures are invented for political reasons” IERPP cautioned.
