President John Dramani Mahama has pledged to rein in deficit financing through central bank money printing, vowing to break from past practices that exacerbated Ghana’s economic turmoil.
During the swearing-in of new Bank of Ghana (BoG) Governor Dr. Johnson Asiama and Deputy Governor Dr. Zakaria Mumuni at Jubilee House, Mahama framed unchecked monetary financing as a catalyst for inflation, poverty, and institutional distrust—urging a return to fiscal discipline.
“When governments fund unsustainable spending by recklessly printing money, the consequences are catastrophic,” Mahama warned, citing spiraling inflation, eroded incomes, and weakened public faith in financial systems. “Let me be clear: I will not ask you to print more money.” The remarks signal a sharp departure from recent years, during which the BoG’s heavy financing of budget shortfalls—peaking at over 10% of GDP in 2022—contributed to inflation soaring to 54% in late 2022 and a historic collapse of the cedi.
The president’s assurances aim to bolster confidence in the central bank’s independence after years of criticism over its role in monetizing debt. Analysts note that excessive liquidity injections during the Akufo-Addo administration deepened Ghana’s economic crisis, forcing the country into a $3 billion IMF bailout program in 2023. Mahama’s stance aligns with IMF directives to halt monetary financing, a key condition for restoring fiscal stability.
Dr. Asiama, an economist and former BoG deputy governor, now faces the delicate task of stabilizing the cedi, curbing inflation (still above 20% as of June 2024), and rebuilding foreign reserves—all while resisting political pressure to fund government spending. His appointment, alongside Dr. Mumuni, a seasoned fiscal policy expert, reflects Mahama’s emphasis on technical expertise amid Ghana’s fragile recovery.
Critics, however, remain skeptical. Previous administrations similarly pledged austerity only to backtrack during election cycles or crises. Mahama himself oversaw significant deficit spending during his first presidency, though he now attributes Ghana’s current woes to “the reckless abandonment of fiscal safeguards” by successors.
Civil society groups have welcomed the commitment to central bank autonomy but stress that words must translate to action. “The true test will come when revenue falls short or political priorities demand quick cash,” said economist Priscilla Twumasi Baffour. “Will the government tolerate higher borrowing costs or spending cuts instead of leaning on the BoG’s printing presses?”
For ordinary Ghanaians, still grappling with steep fuel prices and a 15% VAT hike introduced under IMF reforms, Mahama’s pledge offers cautious hope. “We’ve seen how printing money destroys savings and jobs,” said Accra trader Kwame Adjekum. “If this government means what it says, maybe our currency can finally recover.”
As Ghana navigates its IMF program and debt restructuring, Mahama’s resolve to keep the BoG independent could determine whether the country emerges from crisis—or repeats the cycles of the past.
