BY ROSEMOND BOATENG ADDAI email@example.com
THE GOVERNOR of the Bank of Ghana (BoG), Dr Ernest Addison, has said that as part of efforts to improve stability, the bank is looking at the monetary policy strategies to build on macroeconomic stability, which remains critical to the overall economic growth process.
According to the Governor, the bank will also deepen its collaboration with all stakeholders to resolve the macroeconomic and financial sector challenges confronting the Ghanaian economy.
He said this at a two-day workshop organised by Journalists for Business Advocacy (JBA) to enhance their skills and knowledge of financial and economic reporting.
The workshop, held in Accra and supported by ECOBANK Ghana Limited and BoG, was on the theme ‘Monetary policy: tools for economic issue’.
He commended JBA for organising the workshop because globally, business and financial journalists are increasingly becoming important features of the monetary policy communication process, acting as channels for major policy announcements to financial markets and the public.
Dr Addison explained that in order to strengthen the central bank in terms of the monetary policy, Parliament passed into law the Bank of Ghana Act ,2002 (Act 612).
“This act gives optional independence to the bank and guarantees the bank a fair amount of autonomy in implementing monetary policy and in handling its general issues of governance,” he said.
The Governor, highlighting price stability, said it offers the strong foundation to facilitate growth and development.
He explained that when price stability is achieved and maintained, a low and stable inflation regime will reduce uncertainty, and help economic agents to extract information from relative prices, thus leading to more efficient resource allocation and higher growth.
He said “by controlling inflation through effective monetary policy formulation, the BoG would be making the best contribution that it can to sustainable long-term growth and economic development at large.”
Dr Addison, commenting on the policy framework, said in conducting stabilisation policy, the central bank must maintain a strong commitment to keeping inflation in check such that public expectations of inflation would be firmly under control.
“Because monetary policy influences inflation with a lag, keeping inflation under control may require that the central bank is able to anticipate future movements in inflation and improve pre-emptively,” he explained.
According to the Governor, apart from ensuring price stability, the central bank is also expected to ensure effective and efficient operation of the banking and credit systems to enhance allocation of resources to the productive sectors of the economy.
He said “the BoG has recently rolled out a comprehensive financial sector reform plan to further develop, strengthen and reposition the sector as a major growth drive.”
Mr Morgan Asiedu, Executive Director of Ecobank Ghana, said at the workshop that the bank is grateful that JBA, as part of its objectives, seeks to promote the interests of Small and Medium Enterprises (SMEs) in Ghana, including complete startups.
“This we see as very important and significant contribution towards the development of the nation. As we may be aware, SMEs play a major role in the economy,” he explained.
He added that ” the sector is faced with many challenges, the key being lack of access to credit and high cost of credit”.
Mr Asiedu urged the media to pay attention to current developments in the financial services industry, becasue it requires their support to put Ghana on the right path towards ensuring financial inclusion at all levels across the country in the shortest possible time.
“The financial services landscape globally and particularly in Africa is witnessing fundamental changes in rapid manner. This is partly due to advancement in technology, and actions by telcos and Fintechs (who provide substitute products to traditional banking products and services to customer sophistication, leading to the demand for better and improved financial products and services),” he explained.