BoG Schools Ghanaian Journalists On Monetary Policy and Financial Reporting


The Bank of Ghana (BoG), in partnership with the Private News Publishers Association of Ghana (PRINPAG), Journalists for Business Advocacy (JBA), and the Institute of Financial and Economic Journalists (IFEJ) has organised a 2-day workshop for journalists in the Southern Zone of Ghana to train them on Monetary Policy and Financial Reporting.

The training which was held at Peduase, in the Eastern Region was themed: “Sustaining The Recovery: The Role of Journalist In Building Confidence,” and attracted over twenty journalists.

The training workshop is part of the Bank’s strategic measures aimed at building the capacity of business and financial journalists to improve their understanding and communication of monetary policy issues.

Dr. Philip Abradu Otoo, Director of Research at BoG, who addressed workshop attendees on behalf of Governor Dr. Ernest Addison, noted that the ongoing war and China’s zero-Covid policy have deteriorated pre-existing global supply chain disruptions, triggered food and energy price shocks, and further heightened uncertainty about global growth prospects.

This he said, the accompanying acceleration of inflation in many countries prompted a pushback of Covid-19 era policies and monetary policy tightening across countries.

The swift, almost synchronised shift to a less accommodative policy stance in Advanced Economies to contain inflationary pressures and the slowdown in China’s growth is expected to weigh on macroeconomic outlook for most Emerging Market and Developing Economies with far-reaching implications for the domestic economy.

“The current state of the Ghanaian economy and the policies being pursued; the macroeconomic outlook and policies going forward, and the role of the media is to help rebuild confidence in the economy,” he emphasized.

According to him, at the start of 2022, the global recovery process seemed to gain some traction from the Covid-19 pandemic effects, supported by improved vaccinations and opened economies, despite persisting supply chain constraints.

However, these gains have been short-lived on account of heightened risks emanating from lingering supply chain bottlenecks, China’s zero-Covid policy, and the Russia-Ukraine war.

More so the ongoing conflict, coming on the heels of the Covid-19 pandemic, has notably heightened uncertainty in the financial markets and triggered commodity price shocks.

These developments in conjunction with China’s zero-Covid policy have somewhat weakened the global outlook, culminating in further major downward revisions to global growth projections for 2022 and 2023.

Stressing that these downgrades suggest challenging times ahead in the global economy, unless there is a resolution to the war in Ukraine, alongside possible lifting of sanctions against Russia by the West

Concurrently, the global economy has witnessed a surge in inflation, sparked by rising food and energy prices, persistent and broadened supply chain bottlenecks, and growing demand pressures as economies reopened.

At this moment, inflation has not only breached the set targets across most countries but also reached record high levels, not seen in several decades, and also the pressures have broadened beyond the volatile items of energy and food.

“For example, CPI inflation in the US accelerated from 4.2 percent in April 2021 to 8.5 percent in March 2022 — a 40-year high — before moderating to 8.3 percent in April 2022. Similarly, inflation in the Euro Zone reached 7.4 percent in April 2022 from 1.6 percent in April 2021,” he disclosed.

This he said, the elevated levels of inflation across advanced economies and emerging markets, and developing countries have triggered swift and coordinated rollback of the Covid-related accommodative policies that provided liquidity injections to the economy.

Mr. Philip Abradu-Otto said many central banks have begun tightening their monetary policy stance in order to rein in inflation.

The rising interest rates, especially in advanced economies, and strengthening of the US dollar have led to tighter global financing conditions, leading to capital flow reversals and currency pressures in emerging and frontier economies with fewer buffers, including Ghana.

“Ghana is a market access country, the tightening of global financing conditions, together with fiscal policy challenges, led to a widening of the country’s sovereign spreads and increased the costs and risks associated with accessing international financial capital markets, resulting in a defacto closure of the international markets to Ghana.

The foreign exchange market responded to these events and also witnessed some sharp volatility in the first quarter of 2022, with the local currency depreciating by about 15.6 percent (y-t-d) against the US dollar in March 2022,” he explained.

These developments occasioned strong and coordinated monetary and fiscal policy measures in Ghana, including a hike in the policy rate by 250 basis points to 17.5 percent in March 2022, along with the reversal of the Covid-related macroprudential regulatory relief measures, and the Government’s announced 20 percent cut in expenditures as well as an additional 10 percent cut in discretionary spending to support the fiscal consolidation process.

The Government further announced a syndicated arrangement of US$2.0 billion in line with approved external financing for 2022 and for liability management.

These measures, in concert, are expected to help regain macroeconomic stability and boost investor confidence in the domestic economy.

According to him, efforts at boosting confidence will have to come from all facets of economic life and every institution must play its role.

Stressing that, the press, which seeks to inform, persuade and influence the society must be able to impact the direction of economic thinking and influence society by harking back to the IPI cardinal principle of journalism.

In so doing, the press will have to use all available data at their disposal, to drive analytical discourse and exude confidence. Journalists must go beyond the data provided to them and do more interrogation of the data to understand better, the data generating facts.

The Director of FinTech and Innovation at BoG, Mr. Kwame Oppong, also averred that in recent years the idea of issuing digital currencies by central banks has been topical around the globe.

Explaining that, from the point of the CBDC taxonomy, the digital Cedi (or the eCedi) is a retail token-based CBDC and that the concept is like cash payment transactions, where payment is done by transferring banknotes and/ or coins from person A to person B.

This he said, the eCedi will be under the full control of BoG, which is the only entity to create and destroy digital cash.

Furthermore, the Bank of Ghana is one of the first few African central banks to announce its plan to pilot a Central Bank Digital Currency (CBDC) as part of its financial sector digitisation program and the government’s overall digital agenda.

In a presentation, Dr. Francis Loloh, also of the BoG’s Research Department, stated that the monetary policy committee (MPC) considers three key factors in setting the monetary policy rate: the expected inflation gap, the expected output gap, and the previous monetary policy rate (MPR) level.

A Member of the Research Department, BoG, Mr. Providence Mireku, also explained that monetary policy regulates the value, supply, and cost of money in an economy in order to achieve macroeconomic goals.

According to him, these objectives are to help achieve price stability by keeping inflation under control, reducing output and employment fluctuations, and also exchange rate stability, thus minimising sharp volatilities in foreign exchange flows.

Adding that, the Central Banks traditionally tend to focus on the price stability objective because the high and volatile inflation creates uncertainty, undermines the role of money as a store of value, and discourages investment and output growth.

Source: Isaac Kofi Dzokpo/

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