Economy on track but discipline is key — BoG Governor

By: Ernest Afram

The Bank of Ghana (BoG) has unveiled a comprehensive strategy aimed at consolidating macroeconomic gains and stabilizing the economy, as key indicators such as inflation and external reserves begin to improve.

Governor of the central bank, Dr. Johnson Asiama, said the Bank is taking deliberate and bold steps to restore its financial strength while reinforcing its policy credibility. He stressed that these reforms are crucial for sustaining the positive momentum seen in recent months.

Speaking at the Ghana Association of Banks’ Industry Thought Leadership event in Accra, Dr. Asiama said the BoG is adopting a focused approach rooted in fiscal discipline, internal reforms, and enhanced policy communication.

“The truth is that macroeconomic stability is never given, it is earned and earned through discipline, through credibility, and through timely reforms. So, at the Bank of Ghana, we have recommitted to these principles,” the Governor stated.

According to Dr. Asiama, headline inflation has declined to below 19 percent, down from over 50 percent in early 2023, and the central bank is optimistic that inflation could fall further to under 12 percent by the end of the year.

The BoG governor also pointed to improvements in Ghana’s international reserves and the relative stability of the Ghana cedi as indicators that the economy is gradually recovering.

“We are cautiously, cautiously optimistic, but we are not complacent. The Bank is pursuing three imperatives to anchor our credibility,” he said.

The first imperative, the Governor explained, is to rebuild the Bank’s own balance sheet through strict internal expenditure controls and prudent management of external reserves.

The BoG, which came under scrutiny last year for losses incurred partly due to the government’s domestic debt exchange program, has since committed to restoring its operational integrity.

The second imperative involves a revamp of the Bank’s monetary policy tools. Dr. Asiama said the Bank is now placing greater emphasis on forward guidance and improved liquidity forecasting to enhance the precision and effectiveness of policy decisions. These refinements are intended to increase market transparency, guide investor expectations, and reduce volatility.

The third priority is to strengthen stakeholder engagement and public communication. The BoG believes that consistent and transparent communication with financial institutions, businesses, and the public is key to reinforcing confidence in its policy direction.

“Our credibility is not only based on what we say, but on how we act. That is why we are not only setting targets but also building the systems and discipline to meet them,” he emphasized.

While the Bank of Ghana is playing its part, Dr. Asiama stressed the importance of coordination with fiscal authorities to sustain macroeconomic gains. He said the path to economic stability requires the collective resolve of all stakeholders to adhere to prudent policies and resist the temptation of short-term fixes.

“Sustaining macroeconomic stability will require a coordinated effort of fiscal prudence and monetary discipline,” the BoG governor said.

The Governor also emphasized the Bank’s commitment to reform.

“We are not out of the woods yet, but we are on the right track. The discipline we exercise today will determine the resilience of our economy tomorrow,” he added.