Prudent policies needed to firm up recovery process, Dr Ernest Addison says
Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said prudent fiscal and monetary policies (stabilization policies) are needed to firm up Ghana’s economic recovery from the Covid-19 pandemic.
According to the Governor, prudent fiscal and monetary policies have become necessary given the continued existence of uncertainties in the country’s economic environment occasioned mainly by the third wave of the Covid pandemic amid the economy’s gradual recovery from the adverse effects of the pandemic.
“We are aware that the Ghanaian economy is on a gradual recovery path from the adverse effects of the COVID-19 pandemic. However, there are still uncertainties in the domestic economic environment, such as the third wave of the pandemic, which call for prudent policies to firm up the recovery process and protect livelihoods and jobs without stoking inflationary pressures,” stated the Governor.
“This positions the Bank of Ghana right at the centre of the Government’s agenda to boost growth and create jobs while maintaining macroeconomic stability in the post COVID-19 era,” he added.
Dr Addison made the above statements during the inauguration of a newly constituted Board of the BoG by President Akufo-Addo at the Jubilee House.
The implementation of a combination of fiscal and monetary policies such as fiscal stimulus and reduction of the policy rate to 13.5 percent by the Finance Ministry and BoG respectively, helped in mitigating the adverse impacts of the pandemic on the economy and facilitating its recovery from the pandemic.
The stabilization policies implemented by both the BoG and Finance Ministry saw Ghana record a modest 0.4 percent growth rate at the end of 2020 and is projected to further grow at some 5 percentage points this year on the back of a strong pick-up in economic activities.
Speaking further at the inaugural ceremony, Dr Addison highlighted the achievements of the BoG in the last four (4) years while also noting that prudent policies implemented during the first and second wave of the pandemic have yielded positive results.
“Despite the Covid-19 shock, inflation has eased to single digits and currently within the medium-term target band; the exchange rate has remained relatively stable, supported by adequate reserve levels that currently stands at about 5 months of import cover.
“In addition, we have also implemented financial sector policies which have revamped the banking sector that is now well-capitalised and well-positioned to support the economic recovery and revitalization process from the pandemic. Last but not the least, we have put in place strong regulatory frameworks and the completion of interoperability architecture at a minimal cost that are supportive of the Government’s digitisation agenda,” said the Governor.
Concluding his remarks, the Governor stated that the newly constituted Board is up to the task of implementing sound policies to ensure macroeconomic stability, supported by a safe, sound, efficient and stable market-based financial system.
