The Bank of Ghana wants both fiscal and monetary policies to stay attentive and ready to implement further policy measures, as well as structural change, if necessary, to boost economic confidence.
This, it hopes, will keep the economy afloat.
The Ghanaian economy has been severely harmed by rising inflation and fluctuating currency rates. This is owing to the Russian invasion of Ukraine, which has caused food prices to spike while fuel costs have also surged.
Governor of the Bank, Dr. Ernest Addison, said authorities must implement steps to mitigate the impact of external pressure on the economy while speaking at a training program for certain financial journalists.
Some of the initiatives he wants to see implemented are government spending management and tax reform. with new revenue mobilization measures to support fiscal consolidation and help alleviate financing constraints, as well as bold policies to improve the business operating environment in order to attract private capital – both foreign direct investment and portfolio investment – through rule of law, property rights protection, transparency, and accountability.
Others are pursuing export diversification and building import substitution industries to take advantage of the African Continental Free Trade Area, as well as leveraging technology to improve remittance flows, digitalization and mobile money applications, which present a significant opportunity for improving the financial landscape, and devising mechanisms to tap into diaspora resources, such as issuing diaspora bonds to help close any financing gaps.
"The Central Bank thinks that once these mechanisms are in place and institutions are working hard to give their best, the economy will flourish." Dr. Addison stated that "effective implementation of monetary policy initiatives should help re-anchor inflation expectations, rebuild macroeconomic stability, and restore investor confidence in the economy."
"As an inflation-targeting central bank, the Bank of Ghana sees openness as critical to maintaining the Bank's reputation. Transparency is feasible when reliable reporting educates the public about the precise nature of economic changes as well as the genuine consequences of politicians' actions," he emphasised.
As a result, he noted, the Bank's exchanges with key stakeholders are critical in fostering the establishment of an informed public, whose precise understanding of economic and financial issues is critical to ensuring the economy's smooth operation.
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