Dr. Maxwell Opoku-Afari

The Bank of Ghana is committed to ensuring that the banking and other non-bank financial institutions remain resilient, inclusive, and supportive of resetting Ghana’s post Covid-19 economy back to stability and growth.  

It is therefore calling for short-term strategies to reset Ghana’s economy.

First, it wants the flattened Covid-curve to be sustained.

“By this, priority must be given to health sector policies and other supportive measures including testing, tracing and treatment, alongside mass vaccinations rollouts should continue to achieve some form of herd immunity. The flattened curve would keep the economy open for business, provide some certainty to the economic outlook, and prevent diversion of resources to any resurgence of the pandemic”, First Deputy Governor, Dr. Maxwell Opoku-Afari said at the 5th Ghana CEO Summit.

“Second, maintain the Covid-policy responses to sustain the on-going V-shaped recovery”, he explained.

“To a large extent, the Covid policy responses (accommodative fiscal and monetary policies, macro-prudential measures, and other initiatives) proved timely and helped moderate what could possibly have been a worst outcome for the Ghanaian economy. Already, the implementation of these policies has spurred some recovery evidenced by improvement in the Bank’s high frequency economic indicators for the first quarter of 2021”, he stressed.

Inflation has eased and declined back to single digits in April 2021, the exchange rate remains relatively stable, business and consumer confidence has bounced back, and the Bank of Ghana’s high frequency indicators have rebounded to near pre-pandemic levels. Also, the banking sector remains strong with the support of the macro prudential measures and continues to play its intermediary role to boost growth efforts, post Covid-19.

Dr. Opoku-Afari said the strategies should include innovative and actionable macroeconomic policies to unwind the Covid-related fiscal excesses and lower the public debt to sustainable levels.

He however called for prudent fiscal policies which he said the 2021 Budget has already reset fiscal policy on a consolidation path with the deficit projected to decline to 9.5% of GDP and unwind over the medium-term to 5% by 2024. This it believes would ensure medium-term debt sustainability.

To achieve these fiscal target, the First Deputy Governor said domestic revenue mobilisation through tax reforms has been given some prominence, as the ongoing national digitization programme would be supportive. Already, the Ghana Card and TIN numbers are merged, broadening the tax base.

Also, expenditure rationalization programmes that are pro-growth and promote value-for-money projects would also be critical.

To this end, he said monetary policy and financial sector policies should be designed to anchor the disinflation process, create supportive frameworks for credit enhancement, digitisation, and enhanced payments platforms to support growth.

He added that the socio-economic consequence of the covid-19 pandemic needs to be addressed and the Ghana CARES programme is in the right direction. Among others, it seeks to stabilise, revitalise, and transform the economy to create jobs and prosperity over a 3-year period.

The continued investments in the public health infrastructure over the medium-term are also important to improve the country’s preparedness to adequately handle future health crises, he mentioned.