Ghana central bank official urges vigilant fiscal, monetary actions

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People walk past the Bank of Ghana in Accra, Ghana. Photo by: REUTERS / Zohra Bensemra
Spining

Ghana’s central bank has urged vigilance in monetary and fiscal policies to sustain the West African country’s economic recovery amid prevailing global uncertainties.

Philip Abradu-Otoo, Director of Research at the Bank of Ghana, made this call during a training session Friday for groups of business and financial journalists.

Abradu-Otoo said that despite the latest indications of a robust economy, with a 5.4 percent growth in 2021 from 0.4 percent a year earlier, downside risks remained, including tightening external financing conditions, lingering supply chain bottlenecks, and further headwinds from a protracted Russia-Ukraine conflict.

“Both fiscal and monetary policies should remain vigilant and ready to take additional policy measures as well as structural reforms, going forward, if necessary to improve confidence about the economy to sustain the economic recovery,” he urged.

He said the government’s expenditure control with new revenue mobilization measures would be crucial to support the fiscal consolidation path and help lift financing constraints as prospects for external financing were limited.

Moreover, he said bold policies that would improve the business operating environment to attract private capital in both foreign direct investment and portfolio investments, political stability, and macroeconomic stability would contribute immensely to regaining investor confidence.

Abradu-Otoo added that pursuing export diversification and building import substitution industries to leverage the African Continental Free Trade Area would provide a tremendous opportunity to increase intra-regional trade and regional integration.

“This will help improve the trade balance and possibly the current account and reduce the need for external financing,” he stated.

Furthermore, the central bank official said leveraging technology to improve remittance flows, digitization, and mobile money applications were also critical to deepening the business-friendly environment to boost investor confidence. Enditem

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