By Maxwell Nkansah
The First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, has said the mix of policies implemented by the central bank have helped to moderate the impact of the pandemic on the economy and contributed significantly to a faster pace of economic recovery than anticipated.
He said Ghana managed to record a measured positive growth in 2020 unlike many others that slipped into negative growth rates. Amidst the pandemic and surge in inflation, he said, the central bank has successfully steered inflation back into the target band, a process that was significantly helped by the extraordinary stability in the foreign exchange market in an election year while foreign exchange reserves level is at a record high. Speaking at the Journalists for Business Advocacy (JBA) financial literacy training workshop on Friday July 9, Dr Opoku-Afari said “Ghana’s economy is entering a new phase of its macroeconomic developments with low inflation and well-anchored expectations.
He stated that in the outlook, the signs of recovery are encouraging and would require careful monitoring and, where necessary, continuous comprehensive macroeconomic policies including defining a feasible fiscal adjustment path in the medium term to ensure fiscal and debt sustainability to anchor macroeconomic stability.
Dr Opoku-Afari said “A key issue going forward relates to the timing of withdrawal of policy support. This would need to be carefully done so as not to jeopardize the recovery process and the Bank will continue to monitor development and take appropriate decision. A careful balancing act between unwinding the policy support and would be needed by policy makers to ensure that stability in a post-pandemic environment is guaranteed.”
He added that an important lesson from the pandemic is that it has quickened the drive towards a cash-lite economy and this is likely to shape monetary policies going forward. The widespread use of mobile money was given an added boost when the Ghana Interbank Payments and Settlement Systems (GhIPSS) introduced the national Quick Response (QR) Code payment solution last year to simplify merchant payments and reduce the use of cash. The QR Code has since been made available to banks and payment service providers, as well as small and medium-sized enterprises to enhance business transactions.
Leveraging on financial innovations, the Bank of Ghana has also initiated processes for a pilot central bank digital currency to further move the economy towards a cash-lite environment. In conclusion, as regulators, they believe that under the current inflation targeting regime, transparency is crucial in fostering credibility of the central bank’s policies. Going forward, as financial journalists, perhaps more than any time in the past, you will be expected to play a key role in disseminating their policies to support the recovery process; and, how well this is done will tend to engender confidence in the financial markets and propagation of monetary policy impulses.