Dr. Asiama Outlines Bold Reforms to Strengthen Ghana’s Monetary Stability
By Praisebell Rosemond Larbi
Governor of the Bank of Ghana, Dr. Johnson Asiama, has laid out an ambitious vision to modernise the central bank and position it to effectively manage emerging financial risks while reinforcing confidence in Ghana’s monetary system. His comments came during an interview with Abebe Selassie, Director of the IMF’s Africa Department, where he highlighted the growing complexity of the global financial environment and the need for strong institutional responses.
Dr. Asiama explained that the accelerating evolution of financial technology and the expanding influence of cryptocurrencies continue to reshape traditional financial systems. These developments, he said, require forward-looking reforms, legislative updates, and enhanced technical capacity within the central bank. “Financial technology and crypto pose real challenges, and therefore we are updating legislation, creating capacity, and strengthening our balance sheet to withstand shocks,” he noted.
While reaffirming the Bank of Ghana’s unwavering mandate of ensuring price stability and safeguarding the financial system, the Governor revealed two pressing priorities: tackling dollarisation and building an agile institution fit for future risks. According to him, dollarisation remains a decades-long challenge that weakens the effectiveness of monetary policy. “My mandate is clear: achieve price and financial stability, and I believe we’re on course. But two priorities stand out. First, tackling dollarisation. I’ve seen this challenge for decades, and making the cedi the sole legal tender is critical for effective monetary policy,” he said.
His second priority focuses on preparing the central bank to navigate unpredictable and fast-changing risks. “My vision is a central bank with the manpower, agility, and resilience to manage future risks, crypto today, something else tomorrow,” he stated.
Dr. Asiama also emphasised the importance of strengthening the independence of the central bank, particularly following the impact of the domestic debt restructuring exercise, which severely weakened the Bank’s balance sheet. He disclosed that new legislative reforms have been introduced to eliminate central bank financing of the government and clearly define what constitutes an emergency. These measures, he said, are crucial to preventing a repeat of the financial pressure borne during the recent restructuring. “The impact on banks from sovereign exposure has been significant and should never happen again,” he added.
He further pointed to renewed activity in Ghana’s corporate bond market and ongoing efforts to list more banks on the stock exchange to attract long-term capital and deepen the country’s equity markets.
On foreign exchange management, Dr. Asiama clarified that the Bank of Ghana operates a managed float system designed strictly to reduce volatility, not to dominate the market. He explained that recent interventions were necessitated by large payments to independent power producers and bondholders, as well as reduced remittances resulting from the cedi’s earlier appreciation.
With conditions gradually improving, he highlighted rising mining inflows through the banking sector and noted that unused foreign exchange is now helping rebuild reserves. He also reaffirmed the Bank’s commitment to driving value addition in Ghana’s commodity sector, particularly gold, oil, and cocoa, as a long-term strategy to reduce external vulnerability.
