BoG confident inflation will drop to 12% by year-end

By Praisebell Rosemond Larbi

The Bank of Ghana (BoG) expects inflation to ease in the coming months, following the implementation of a tight monetary policy designed to bring it down toward its 12 percent year-end target.

Dr. Zakari Mumuni, First Deputy Governor of the Bank of Ghana, made this disclosure at the Ghana Diaspora Investment Forum in Accra.

He explained: “Headline inflation is expected to trend further down toward the 12 percent year-end target, supported by a tight monetary policy stance.”

Dr. Mumuni further stressed that improved macroeconomic fundamentals will aid this process, while growth is projected to remain strong. “Macroeconomic fundamentals are projected to improve further, creating a business-friendly environment for investors, while growth is expected to remain strong this year,” he said.

Role of Remittances in Reserve Build-Up and Cedi’s Stability
Dr. Mumuni revealed that remittances from Ghanaians living abroad have become a key contributor to the country’s reserve build-up. He explained that ongoing policy reforms aim to enable tighter oversight and greater incentives for diaspora remittances, thereby strengthening the country’s financial stability.

“The Bank of Ghana, on its part, has provided a layer of security and transparency and encouraged diaspora communities to channel more funds to Ghana,” Dr. Mumuni assured.

He further pledged that the central bank would continue developing innovative financial products tailored to diaspora investment and financial settlements in the country.

Strengthening Banking Sector to Attract Diaspora Investments
Dr. Mumuni stressed that strengthening the banking sector is a major priority for unlocking diaspora investment. This, he explained, involves offering tailored financial products, strengthening digital financial platforms, and addressing barriers to investment.

He also cited policy initiatives and regulations implemented by the BoG, including the Payment Systems and Services Act, 2019 (Act 987) — which collectively aid in strengthening payments, financial stability, and investor confidence.

Innovation and Regulations to Support Digital Finance
Turning to innovation and financial regulations, Dr. Mumuni assured stakeholders that technology would be a key tool in strengthening the banking sector.

“The central bank is looking forward to developing emerging innovations, such as digital assets, to enable greater investment options for Ghanaians at home and abroad. The bank has initiated steps to develop guidelines for the regulation of digital credit delivery in Ghana, a move designed to provide an optimal balance between innovation and financial stability.”