A report, produced by the Office of the Chief Economist for the Africa Region of the World Bank dated June 2024 has affirmed policy effectiveness of the Bank of Ghana in controlling inflation.
The Country Policy and Institutional Assessment (CPIA) Africa report, which focused on reforms across policy areas in Sub- Saharan Africa noted that “Ghana’s authorities committed to policy reforms to strengthen the central bank’s independence”.
And that “This contributed to pursuing tight monetary policy, raising reserve ratios, and implementing a fiscal reform program that helped to reduce year- over-year inflation from 54 percent in December 2022 to 23 percent in December 2023”. The report was launched in Accra, Ghana, on July 16, 2024.
Overall, the report highlights key trends and best practices to guide policy makers and international investors on the policy developments in the region, following the World Bank’s annual CPIA of countries eligible for International Development Association (IDA) assistance.
The observation made in the report reflects the long-held view of analysts and economists that the central bank’s monetary policy tightening stance has largely contributed to more than 30 percentage points drop in inflation from December 2022 to date.
On July 16, 2024, during the Ministry of Finance-organised SME Growth and Opportunity Summit held in Accra, the Governor of the Bank of Ghana, Dr. Ernest Addison noted that “the Bank of Ghana has stepped up efforts to bring inflation under control, eliminate monetary financing of budget, and rebuild foreign currency buffers”.
“Just last week, the country successfully went through completion of the Second Review of the IMF programme by the IMF Board. The Board reaffirmed the generally strong program performance and clear signs of emerging economic stabilisation. However, noting substantial downside external and domestic risks, they underscored the importance of steadfast reform implementation to entrench macroeconomic stability and debt sustainability while fostering sustained growth and poverty reduction. Sustaining macroeconomic stability requires the Bank of Ghana to continue to ensure that the BOG keeps an eye on inflation”, the Governor noted.
