Interest rate hikes alone won’t solve Ghana’s economic woes

Slow progress in tackling the enormous twin budget and current account deficits means that today’s decision from the Bank of Ghana to hike interest rates is unlikely to curb the sharp depreciation in the cedi and soaring inflation. Looking ahead, further rate hikes are likely but, in the absence of substantial fiscal reform, Ghana’s economic woes look set to continue. Indeed, we think the authorities may eventually have to seek assistance from the IMF.