Don’t get distracted from your mandate - Akufo-Addo urges BoG

President Nana Addo Dankwa Akufo-Addo has urged the Bank of Ghana (BoG) to remain focused on its mandate and not be distracted by misguided elements.

He commended the central bank for being a sound banker to the government and a safe custodian of the country’s money.

At the End of Year Cocktail of the Bank of Ghana last Friday, the President said in the last seven years, the central bank had distinguished itself in discharging its duties to the admiration of all well-meaning Ghanaians.

He said the current economic challenges of the country required all hands-on deck and, therefore, asked the central bank to focus on helping in the formulation and implementation of policies that would usher in economic development.

President Akufo-Addo said the BoG must do that within the remit of its operational independence.

Context

The Bank of Ghana has recently come under criticism following its decision to take a 50 per cent hair cut during the debt restructuring exercise to enable the government to get a deal with the International Monetary Fund (IMF).

President Akufo-Addo stated that the BoG had also been an efficient currency manager, a reliable source of liquidity and a dependable lender of last resort.

“When COVID-19 struck with its dire consequences for the country, the BoG, with the support of the commercial banks, instituted the GH¢3 billion credit and stimulus package to help revitalise industries, especially the pharmaceutical, hospitality and manufacturing sectors, and we have all seen the effects of this intervention, evidenced by the growth of the economy,” he stated.

The President said one of the challenges his government met in 2017 was the state of the banking industry, with a lot of banks and financial institutions in distress and kept on unsustainable life support.

“The supervisory agencies of the BoG were not performing their duties which allowed weak governance management structures in banks to fester.”

“We were in a desperate situation and radical measures had to be taken to prevent the collapse of the financial sector and the BoG under the new leadership intervened and restored sanity in the sector and in the process saved the funds of 4.6 million depositors,” President Akufo-Addo stated.

Support from BoG

President Akufo-Addo added that with the support of the BoG, macroeconomic stability was being restored, adding that the central bank had supported the government by providing a sound platform to underpin its economic diversification and transformation process.

“I am also encouraged by the many corporate governance measures put in place by the BoG to mitigate future bank failures and ensure that we have a strong banking sector to drive the agenda of transformation.

“Recent policy measures introduced by the BoG are commendable and in line with efforts in moving Ghana to a situation beyond aid,” he stated.

President Akufo-Addo further said he had taken keen interest in the bank’s role in the digitalisation of the economy, noting that the country’s payment architecture had been transformed completely and financial inclusion had been deepened to ensure shared growth for all Ghanaians.

He said all those made the BoG an institution of excellence, reflecting the recent international recognitions of the central bank. 

Collaborative spirit

The Minister of Finance, Ken Ofori-Atta, also speaking at the cocktail said in spite of the recent global upheavals that had put the economy under strain, the collaborative spirit between the Ministry of Finance and the Bank of Ghana had never been stronger.

He said together they had strived to reset the financial architecture and despite the challenges over the last three years, they had turned the corner towards a more robust and transformed economy.

“Indeed, amid these trials, our united front in managing the Bank of Ghana's balance sheet has been nothing short of heroic.

Economic growth has rebounded, the exchange rate is more stable, and interest rates are softening,” Mr Ofori-Atta stated.

He said more importantly, inflation had also declined to 26.4 per cent from the 54.1 per cent recorded in December 2022.

Going forward, the Finance Minister said, 2024 would be a period in which the two must continue to push boundaries, work with equanimity, and dispel any cloud of nihilism to guarantee economic freedom and social mobility for all.

Inflation to drop further

For his part, the Governor of the BoG, Dr Ernest Addison, gave an assurance that inflation would soon return to the pre-crisis levels.

“I kept on reminding people that inflation was at 12.7 per cent in December 2021 and what we saw in 2022 should not be used to judge us,” he said.

“As you are aware, there has been considerable noise from our detractors who have celebrated the high inflation recorded in 2022.

 Today, we are vindicated that inflation in 2022 was just a blip and we are quickly returning to where we were before the crisis,” he stated.