The Bank of Ghana wants both fiscal and monetary policies to remain vigilant and ready to take additional policy measures as well as structural reform is necessary to improve confidence in the economy.
This it believes will sustain the economic recovery.
The Ghanaian economy has come under severe pressure with inflation soaring and exchange rate fluctuation. This is due to the Russian invasion of Ukraine which has pushed prices of foodstuffs significantly up, while prices of petroleum products have also skyrocketed.
Speaking at a training workshop for some financial journalists, Governor of the Bank, Dr Ernest Addison said policymakers must adopt measures that will limit the impact of the external pressure on the economy.
Some measures that he wants to be pursued include government’s expenditure control together with new revenue mobilization measures that would support the fiscal consolidation path to help lift financing constraints and bold policies to improve the business operating environment to attract private capital – both foreign direct investment – and portfolio investment through rule of law, protection of property rights, transparency and accountability.
Others are pursuing exports diversification and building imports substitution industries to leverage the African Continental Free Trade Area, leveraging technology to improve remittance flows, digitalization and mobile money applications which offer a great opportunity in improving the financial landscape and devising mechanisms to tap in diaspora resources including issuing diaspora bonds to help close any financing gap.
“The Central Bank believes that when these structures are firmly established and institutions are working to deliver their best, then, together with the sound pursuit of monetary policy actions, should help re-anchor inflation expectations, regain macroeconomic stability and restore investor confidence in the economy”, Dr Addison mentioned.
“As an inflation-targeting central bank, the Bank of Ghana views transparency as key in promoting the credibility of the Bank’s policies. Transparency is possible when accurate reportage informs the public of the exact nature of developments in the economy as well as the real implications of actions taken by policymakers”, he stressed.
Therefore, he added that the Bank’s engagements with key stakeholders are necessary to foster the creation of an informed public, whose accurate grasp of economic and financial issues is crucial to guarantee the smooth functioning of the economy.
Further, Dr. Addison said efforts at boosting confidence will have to come from all facets of economic life and every institution must play its role, adding, in no particular order, the government must play its role in delivering growth in a stable economic environment, the Central Bank will have to guarantee low and stable inflation using the tools available at their disposal, while the private agents must take advantage of conditions around them.”
Also, the Governor said “the press must leverage all to influence the direction of economic thinking and to influence society by harking back to the IPI cardinal principle of journalism. The press must inform, persuade and influence society. In so doing, the press will have to use all available data at their disposal, to drive analytical discourse and exude confidence. Journalists must go beyond the data provided them and do more interrogation of the data to understand better, the data generating facts.”
He charged financial and business journalists to gingerly assess the implications for the economic and financial stability of information they intend to publish, saying, “workshops like this can help equip journalists like yourselves with the relevant knowledge of the financial sector and the nature of risks and incentives facing the sector.”
“The role of the press here is also critical and that is what I want to stress. We see the role of journalists as key facilitators in the transmission mechanism of policy actions. Accurate reportage helps transmit policies quicker and monetary policy becomes efficient”, he explained.
He concluded that the Central Bank is committed to improving the quality of financial and business journalism in Ghana.