BoG Opens Doors to Traders, Breaking It Down for GUTA to Bolster Policy Transparency
In an unprecedented move to deepen transparency and rebuild trust with the business community, the Bank of Ghana (BoG) held a high-level stakeholder engagement with the leadership of the Ghana Union of Traders Association (GUTA) on Friday, April 4, 2025. The meeting, which is part of the Bank’s post-Monetary Policy Committee (MPC) outreach, offered traders a rare glimpse into the inner workings of the central bank’s inflation-targeting strategy, which has drawn sharp criticism in recent months due to high borrowing costs and a volatile macroeconomic environment.
Hosted at the Bank’s headquarters, the session was as much symbolic as it was strategic, marking a shift in the Bank’s approach to policy communication and stakeholder inclusion. The decision to meet GUTA followed the Association’s public commentary on the implications of recent monetary tightening and offered both parties a chance to reconcile divergent narratives over inflation, interest rates, and liquidity conditions in the economy.
“This is not the first time we are engaging with you,” remarked Mr. Bernard Otabil, Director of Communications, addressing the gathering. “But it is the first time we’ve brought you into our corridors—figuratively speaking—to explain the ‘why’ behind our decisions. Transparency is not just an ideal. It is a strategic necessity.”
The central bank’s emphasis on transparency comes on the heels of a landmark reform: for the first time since the inception of its inflation-targeting regime, BoG has published the individual voting records of MPC members. This move, long advocated by analysts and civil society groups, is seen as a step toward aligning Ghana’s central bank with international best practices in monetary policy governance.
At the heart of the engagement was an attempt to demystify the Bank’s policy rate decision, a move that traders argue has compounded their operational difficulties. Ghana’s benchmark policy rate currently stands at one of the highest in sub-Saharan Africa, as the Bank seeks to contain inflation that has hovered around 22 percent over the past two years.
BoG officials were candid in their diagnosis. Inflation, they explained, is proving stubbornly persistent, with food prices now approaching 30 percent year-on-year, exerting the greatest pressure. “Even when we exclude food items from the inflation basket, we are still above our target band,” said the official. “That tells you how entrenched the pressures are.”
In addition to inflation, the Bank cited a buildup of excess liquidity in the banking system as a primary concern. According to officials, year-end government spending and fiscal slippages in the last quarter of 2024 injected substantial funds into the financial system. “This liquidity is looking for work,” a BoG official quipped. “If we don’t act, it spills into the economy and fuels more inflation.”
This perspective, however, was initially at odds with GUTA’s assessment. Dr. Joseph Obeng, President of the Association, questioned how the Bank could speak of excess liquidity when many traders and contractors are experiencing cash flow constraints. “That’s my layman’s understanding,” he said. “But now we know you’re fighting it from another angle.”
The frank exchange underscored the trust deficit that often clouds monetary policy in developing economies. For many small businesses, policy decisions feel remote and technocratic, disconnected from their lived realities. But the tone at Friday’s meeting suggested a possible recalibration.
“We are very happy that you’ve explained yourself,” Dr. Obeng told the Bank. “Now we can go back to our members with clarity and context. We are no longer speculating in the dark.”
Indeed, the issue of speculation, particularly in the foreign exchange market, emerged as a point of convergence. Both parties acknowledged that panic-buying of foreign currency, often driven by misinformation, exacerbates exchange rate volatility. GUTA pledged to work with the Bank to curb speculative behaviours among traders, suggesting a channel for real-time information exchange between the central bank and trading groups.
For the BoG, the interaction with GUTA could serve as a new model for its economic communications strategy. Officials described the meeting as akin to a “business confidence survey,” one that would feed directly into deliberations at the next MPC meeting.
After the meeting with GUTA, there was a palpable shift in tone, one that leaned toward collaboration rather than confrontation. Dr. Obeng closed by urging continued engagement: “Technocrats and practical people must work together. That’s the only way we achieve the results we all seek.”
As Ghana navigates the turbulence of a post-COVID recovery, fiscal tightening, and external shocks, central bank credibility remains crucial. But as Friday’s meeting revealed, credibility cannot be sustained by policy orthodoxy alone. It must be reinforced through dialogue, trust, and a shared vision for economic stability.
