General

The interconnectedness of economic elements can often create a domino effect, where a ripple in one sector can trigger a tidal wave in another. This is notably observed in the relationship between inflation and poverty. Recent events in Ghana provide a stark illustration of this phenomenon. The country, celebrated for reducing its poverty rate by over half from 52.6% in 1991 to 21.4% in 2012, has faced economic challenges. The World Bank’s 7th Ghana Economic Update revealed that an unexpected price surge in 2022 plunged close to 850,000 Ghanaians back into poverty, effectively undoing years of economic progress. Understanding Inflation Inflation refers to the rate at which the general level of prices for goods and services is rising. It decreases purchasing power – each currency unit buys fewer goods and services. Inflation is quantified as an annual percentage increase, and as the inflation rate rises, the currency’s purchasing power falls. The most common measures of inflation are the Consumer Price Index (CPI) and the Wholesale Price Index (WPI). Inflation has a direct impact on the economy. Moderate inflation is expected in a growing economy. However, high inflation can be harmful, causing uncertainty and discouraging investment and savings. Inflation can severely disrupt economic and social order at very high levels, as witnessed in hyperinflation scenarios like Zimbabwe in the late 2000s. The Situation in Ghana Ghana’s recent economic woes can be attributed to a variety of factors. The World Bank report pinpoints an increase in prices throughout 2022, resulting in a loss of average purchasing power by 15.7%. This situation was felt across all income levels, with the poorest 20% of the population losing 16.1% of their purchasing power and the wealthiest 20% losing 15.5%. Everyone felt it across the board. Notably, these losses intensified towards the end of the year as inflation surged. A substantial contribution to this inflationary situation stemmed from Ghana’s energy sector. Challenges such as electricity underpricing, the poor performance of distribution companies, and excess power generation and gas supply contracts have led to a buildup of sectoral arrears totalling about $2.3 billion by the end of 2022. Without corrective action, these arrears could exceed $8 billion by 2025. Even with the government’s attempt to increase electricity tariffs, exchange rate depreciation eroded the gains as most generation costs are incurred in US dollars. We need to understand that combating Ghana’s inflation is an uphill battle. Link Between Inflation and Poverty The effect of inflation on poverty is multifaceted. First, inflation can cause wage stagnation. In Ghana, the minimum wage increased by only 10% in 2022, even as the general price levels rose by over 53%, meaning workers’ real incomes dropped by over 43%. This disparity implies that income can’t keep up with the rising cost of living, pushing people towards or further into poverty. Secondly, inflation leads to higher costs of goods and services. Any price increase can be significant for low-income households already stretching every cedi. The rise in costs can force families to forgo necessary expenses, like healthcare or education, perpetuating a cycle of poverty. Lastly, inflation can wipe out savings. Many people, especially those living in poverty, don’t have the luxury of investing in inflation-protected assets. If they have them, their savings are often in cash or cash-equivalent assets whose value is eroded by inflation. This problem was highlighted in Ghana, where rising inflation caused households to deplete their savings or sell assets to meet their needs. In the case of Ghana, inflation also led to a regressive effect on power tariffs. The necessity of fiscal sustainability led to a significant increase in electricity tariffs, with the most considerable impact felt by those consuming between 30 and 200 kWh per month. This burden was particularly heavy for the poorest households, who consume nearly 70 kWh per month. This situation was exacerbated by the depreciation of the cedi, which drove up prices of imported goods and services and increased pressure on domestic substitutes’ prices. Impact of Inflation on Ghana’s Economy The repercussions of inflation are not restricted to individual households but extend to the macroeconomic level, disrupting the economic equilibrium. For Ghana, the surge in inflation in 2022 delivered a blow to the country’s economic growth and amplified existing fiscal vulnerabilities. The Ghanaian cedi faced significant depreciation, which amplified the rate of inflation. Let me explain – when a country’s currency depreciates against others, the prices of imported goods increase. The World Bank report acknowledges this, stating that the depreciation of the cedi has contributed to inflation by driving up the prices of imported goods and services and putting pressure on domestic substitutes’ prices. It’s crucial to remember that Ghana, like many developing economies, heavily relies on imports for consumer and capital goods. As a result, currency depreciation led to a dramatic increase in the prices of these imports. But that’s not all. The depreciation also impacted the domestic production sector, making imported inputs more expensive. In a knock-on effect, the prices of locally produced goods rose, adding to the inflationary pressure.  Moreover, the report noted that many energy sector costs are incurred in US dollars. This means that as the cedi depreciated, the cost of maintaining the energy sector, crucial for any functioning economy, escalated, causing an additional fiscal burden. The government, striving to compensate for this, was forced to increase electricity tariffs, which led to higher living costs for households and, consequently, increased poverty levels. Strategies to Mitigate Inflation Mitigating inflation, particularly in a complex scenario like Ghana’s, requires careful economic planning. Central to any plan should be strategies that address the root causes of inflation while ensuring that these measures do not disproportionately impact the most vulnerable groups in society. Here, both government and financial institutions have significant roles to play. The government could start by strengthening the energy sector. By eliminating inefficiencies and focusing on sustainability, they can reduce the budgetary support required for this sector. The World Bank report mentions that the Energy Sector Recovery Program (ESRP), initiated by

In the ever-evolving tech industry, some trailblazers transcend conventional boundaries and carve their paths to unprecedented success. One such exceptional individual is Otema Yirenkyi, Area Vice President for Salesforce, whose unwavering pursuit of excellence has propelled her to soaring heights. As the host of the ‘Entrepreneur In You’ Video Podcast Series and also an ardent admirer of Otema Yirenkyi’s awe-inspiring journey, I had the honour of witnessing the unfolding chapters of her extraordinary adventure in the tech industry as we discussed various subjects matters on one of the episodes this month of May. Within our discussions, I had the opportunity to delve into the depths of Otema’s visionary mindset and uncover the wellspring of her purpose. The feature was specially designed out of the many to empower you with the full potential for you to recognise the boundaries you have and, most accurately, the ones you do not have. First, and little background here: I watched this podcast episode titled “Techforce in Africa: The Not-So Glass Ceiling, Discussing Women in Tech”. On this Podcast, Otema Yirenkyi was asked about the best career advice she’s ever received. She said, “there are no limits… there are no limits.” That blew my mind, the question of how she came about that. This inspired me to invite her for a feature on the ‘Entrepreneur In You’ Video Podcast Series to share with the world and with you her empowering mantra: “There Are No Limits”. This profound declaration has become the catalyst behind her remarkable career. On the podcast, we delve deep into Otema’s extraordinary journey, exploring the strategies she employed to cultivate a mindset of boundless potential and the profound impact it has had on her trajectory in the tech industry. I had the opportunity to delve into Otema Yirenkyi’s multifaceted personality and explore the facets that make her a “versatilist”. Otema’s choice of “versatilist” to describe herself resonated, encapsulating her ability to navigate various realms and excel in diverse pursuits. Being a versatilist means embodying versatility and having a wide range of experiences. Otema’s journey exemplifies this in every aspect. Her passion for the tech industry has propelled her to explore different facets of the field. In addition, Otema’s ability to seamlessly transition between roles and adapt to new challenges showcases her innate versatility, constantly pushing the boundaries of her capabilities. During our discussion, Otema candidly revealed her introverted nature, which may surprise those who witness her dynamic presence and extensive accomplishments. Her introverted nature is a source of strength, allowing her to delve into her thoughts, tap into her creativity, and emerge with groundbreaking ideas. When I inquired about her favourite time of the day, Otema’s response highlighted her commitment to productivity and seizing the early hours. Mornings serve as her launching pad for the day, providing her with a sense of purpose and an opportunity to set the tone for what lies ahead. Otema’s affinity for mornings reflects her drive to make the most of each day, as she understands the significance of starting early and harnessing the productive energy that the early hours bring. Amidst our conversation, Otema graciously shared one of her favourite quotes that point to her unwavering belief in the power of possibilities. “I Dwell In Possibility” by Emily Dickinson resonates deeply with her, serving as a guide throughout her journey. Otema embarked on a reflective journey of self-discovery prompted by a significant moment of introspection. She questioned her chosen career path, realising that her initial desire to pursue law had been driven by external pressures rather than genuine passion. Engaging in deep self-reflection, she confronted the fundamental question: “What defines me?” This process allowed her to clarify her ambitions and set the stage for her remarkable personal transformation. Otema vividly recalls a pivotal moment in her career when she first embraced the transformative mindset of limitless possibilities. She reminisced about a conversation with her mentor when she decided not to pursue law school. Uncertain about her next steps, her mentor imparted profound advice: “There are no limits. Go out there and be great at what you believe you can do.” These words resonated deeply within Otema, igniting a fire of determination and courage. Driven by a desire to work with the United Nations (UN), Otema embarked on a journey of research and self-discovery. She meticulously studied the organisation she aspired to join, the UNIFEM (United Nations Development Fund for Women). She discovered that the head of the organisation was working with a volunteer group. Recognising the value of access, Otema wasted no time signing up as a volunteer, actively participating in their events, and gaining valuable insights into the industry. With newfound knowledge and the art of networking, Otema mustered the courage to approach the individuals she admired and expressed her interest in learning from their experiences. To her astonishment, they revealed that internship opportunities at the UN were on the horizon. What initially seemed like an unattainable dream had now transformed into a tangible possibility. Otema attributes her success to diligent research, cultivating meaningful connections, and giving back through volunteer work. Otema has developed strategies to cultivate and maintain the empowering mindset that there are no limits. She believes in the power of introspection and regularly employs interrogative pronouns to guide her self-reflection and decision-making processes. The first question Otema encourages others to ask themselves is, “Who are you?” Then, individuals can align their goals with their authentic selves by delving deep into one’s true identity and understanding personal motivations and aspirations. Otema emphasises the importance of acknowledging whether the drivers of success stem from genuine desires or external influences. The following interrogative pronoun she utilises is “What.” Otema prompts individuals to identify what they genuinely want to do. By connecting with their passions and innate talents, they can discover their true calling and embark on a path that resonates with their authentic selves. The question of “When” is also crucial in Otema’s framework. She encourages individuals to define their desired timeline for achieving

As we strive to optimise decision-making efficiency, we must be mindful of illogical choices that may infiltrate our lives. How can we ensure that our decisions are optimised for success? Our cognitive processes tend to swiftly and unexpectedly justify a desire as soon as it becomes alluring. However, it is prudent to note that appearances do not hold the utmost significance. On numerous occasions, I have found myself questioning the correctness of my actions, despite having meticulously compiled a multitude of compelling justifications in support of my decisions. Within the domain of human decision-making, one dominant force prevails in terms of its impact: the power of rationalisation. This inherent psychological mechanism enables us to reason and justify our actions, particularly those that may appear illogical or risky to external stakeholders. UNDERSTANDING RATIONALISATION The rationalisation process entails utilising sound logic to validate actions or sentiments that could be perceived as controversial. A rationalisation is when people consciously try to enhance their acceptability and even elevate their admiration of a decision before, during or after it is made. We must construct a sound and logical justification for conclusions that were initially arrived at through alternative mental methods. Business people must avoid impulsive, high-risk business decisions that stem from greed or a desire for quick wealth. While we understand the appeal of potentially high returns, it is crucial to always make decisions based on a well-considered financial strategy. RATIONALISING THROUGH SELF-DECEPTION The possibility of self-deception is always considerable, leading to a distorted view of actuality. It is not always easy winning an argument against yourself. We must refrain from rationalising our imprudent choices as it impedes our capacity to learn from our errors and perpetuates a pattern of suboptimal decision-making. A good example is the phenomenon of compulsive consumerism. Studies have shown that many individuals overspend on non-essential clothing and accessories and rationalise it by referring to future-readiness, economic growth, or personal branding. In this scenario, their implementation of rationalisation may impede their ability to recognise and address a potential compulsive buying behaviour. THE ROLE OF RATIONALISATION IN CONSUMER BEHAVIOUR Rationalisation holds significant sway over consumer behaviour. For example, a consumer may acquire a car surpassing their financial capacity and rationalise the decision by emphasising its exceptional safety features, state-of-the-art technology, or potential for augmented resale value.  Businesses can leverage rationalisation to drive premium purchases and encourage consumers to prioritise long-term benefits over short-term costs. This presents a valuable opportunity for savvy marketers. But how does the consumer win if marketers only want you to keep reaching for your wallet?  RATIONALISATION IN INTERPERSONAL RELATIONSHIPS In interpersonal dynamics, rationalisation often occurs when individuals persist in engaging in harmful relationships. In some cases, individuals may continue to engage in an unhealthy relationship, rationalising their behaviour by highlighting their partner’s occasional acts of kindness or taking responsibility for any conflicts. We must avoid explaining in instances like this as it impedes individuals from taking the necessary actions to improve their situation or depart from a destructive relationship. RATIONALISATION AND COGNITIVE DISSONANCE The significance of rationalisation in addressing cognitive dissonance cannot be overstated. This principle is a cornerstone of the psychological theory presented by Leon Festinger in 1957.  Cognitive dissonance is the psychological discomfort that arises when an individual’s actions are not aligned with their beliefs. Cognitive dissonance occurs when an individual experiences a distressing mental state due to conflicting attitudes, values, or viewpoints regarding the same subject.  An exemplary illustration of this scenario is that of a smoker who, despite knowing very well that smoking culminates in lung cancer, persists in smoking to alleviate immediate stress, only to encounter remorse later. This emphasises a notable contradiction between an individual’s espoused principles and their spontaneous emotions or behaviours. THE UPSIDE OF RATIONALISATION Although rationalising may have its drawbacks, it can also yield positive outcomes. At times, utilising coping mechanisms can aid in managing decisions that have yielded unforeseen or unfavourable results. Identifying silver linings or takeaways from seemingly indelicate choices is imperative for preserving one’s mental health and avoiding remorse or self-blame.  Consider an individual who decides to start a business venture that ultimately results in its downfall. The decision could be rationalised by emphasising the valuable lessons and experiences gained during the process, which will benefit future business endeavours. Implementing rationalisation can protect against adverse sentiments and aid individuals’ ability to manage life’s obstacles and succeed in subsequent efforts. RATIONALISATION IN DECISION-MAKING PROCESSES In the realm of decision-making, rationalisation is paramount in both individual and organisational choices. In the business world, it’s common to observe rationalisation when a risky decision results in unfavourable consequences. The leadership team must consider external factors and market fluctuations that may have impacted our outcomes while also considering any potential missteps in decision-making or strategic planning. Implementing rationalisation measures may hinder productive critical analysis and learning opportunities within the organisation. But on the other hand, acknowledging this inclination towards rationalisation can promote a deliberate decision-making process, inspiring individuals and teams to take responsibility for their decisions and derive insights from their results. RATIONALISATION AND MORAL CHOICES The impact of rationalisation on our ethical decision-making cannot be overlooked. When individuals behave in a manner that contradicts their moral or ethical principles, they frequently use rationalisation to justify their conduct and mitigate unease. In certain circumstances, an individual who upholds honesty as a core value may justify their decision to deceive by perceiving it as a necessary measure to avert harm or as a well-intentioned ‘white lie’. Grasping this facet of rationalisation can heighten our moral consciousness and motivate us to align our actions with our principles. THE IMPACT OF RATIONALISATION ON MENTAL HEALTH While short-term rationalisation may offer a viable solution, prolonged or excessive rationalisation can harm one’s mental well-being. Also, failure to acknowledge genuine emotions or problematic behaviour can result in heightened stress, anxiety, or other mental health concerns over an extended duration. Individuals with social anxiety may opt out of social gatherings and justify their choice by expressing a