Finance Minister Ken Ofori-Atta has highlighted the remarkable progress made by the Bank of Ghana (BoG) and emphasised the need for a collaborative approach to navigate the complex economic challenges facing the country.
Over the past seven years, the Bank of Ghana has quietly but effectively played a critical role in the nation’s economic stability. Mr Ofori-Atta, in an thought-leadership article, commended the central bank for its prudent and resilient approach – which had gone largely unnoticed until the recent upheaval caused by global events.
The Bank of Ghana’s financial strength has grown remarkably during this period. Its assets increased from GH¢53billion in 2016 to GH¢126billion by the end of 2022, mirroring growth of the financial sector and overall economy. Government’s revenue has more than doubled, contributing to economic growth and the welfare of citizens.
Moreover, the Finance Minister underscored substantial progress made in various sectors including digitisation, infrastructure development, education, agriculture, healthcare and security. These advancements have been achieved despite the need for macroeconomic stability, particularly during turbulent times like the COVID-19 pandemic and geopolitical challenges.
Mr. Ofori-Atta acknowledged collaborative efforts between the Ministry of Finance and Bank of Ghana to recalibrate the financial landscape, ensuring that economic gains are not eroded by short-term volatility. He noted that external factors often influence such volatility, making it crucial for fiscal and monetary policies to work in harmony.
One of the key aspects discussed was the evolving role of central bank balance sheets. Historically, central banks were primarily concerned with quantitative targets, but they have shifted toward price targets, allowing for more interventionist roles to support economic recovery. This shift has led to central banks incurring losses in various economies worldwide, including Germany, Australia and the United States, without compromising their policy objectives.
The minister emphasised the importance of viewing central banks as financially sustainable institutions rather than profit-making entities. In these extraordinary times, it is imperative to utilize all available tools in navigating challenges and supporting the greater public good.
Regarding the recent debt operations of government, which had an impact on the Bank of Ghana’s balance sheet, the minister explained that these measures aimed to reduce interest payments for government and put the country on a sustainable debt trajectory. He assured that efforts will be made to restore the central bank’s balance sheet in the medium-term, focusing on operational efficiency.
He further called for a constructive national debate on financial institution governance and operational independence for the central bank. He praised Governor Addison for his competent leadership during a period of economic turmoil, and highlighted their joint efforts in ensuring stability and inviolability of the banking system.
The Finance Minister urged unity and restraint in choices and actions, emphasising the importance of national cohesion and a collective effort to overcome challenges. He closed with an optimistic outlook, expressing confidence that Ghana will prevail and prosper by working together toward economic freedom, social mobility and social cohesion.
In these challenging times, Mr. Ofori-Atta’s message resonates as a call for solidarity and collaboration to secure a brighter future for Ghana.