The Bank of Ghana's monetary policy tools in fighting inflation have been described as ineffective, a research by Dr. Richmond Atuahene (Banking Consultant), Isaac Kofi Agyei (Data & Research Analyst), and K.B Asante (Chartered Certified Accountant) has pointed out.
According to the report, these measures have been excessively utilised in previous years and are not effective due to the structure of the Ghanaian economy, which has developed a level of resistance to them over time.
“Addressing Ghana's economic challenges requires a comprehensive approach that goes beyond relying solely on traditional monetary policy tools like increasing commercial banks' reserve requirements or adjusting monetary policy rates”, the report mentioned.
“Bawumia (2010) affirms that the high level of reserve requirements (monetary policy instrument) reflects a legacy of high fiscal deficits”, it stated.
In addition to monetary policy adjustments, the report said significant fiscal interventions are necessary to navigate the economic difficulties. This includes implementing substantial reductions in government expenditure to alleviate the current economic strain.
It further stated that to combat inflationary pressures effectively, authorities must proactively reduce central government spending by an additional 30%, with a particular focus on trimming down flagship programs that have failed to deliver significant economic benefits since their inception.
“In summary, the government should refrain from burdening the banks and instead concentrate on making drastic cuts to its excessively large budget. Commercial banks have incurred considerable losses as a result of the DDEP [Domestic Debt Exchange Programme] and are still in the process of recuperating; they should be allowed to fully recover without further burdens!” it concluded.
These measures have been excessively utilized in previous years and have become less effective due to the structure of the Ghanaian economy, which has developed a level of resistance to them over time
Latest Stories
-
There are greener pastures in Ghana-Prof. Owusu-Dabo optimistic of country’s potential
1 hour -
Myjoyonline Interview with Abubakar Tahiru: Guinness World Record Holder for ‘Most Trees Hugged In An Hour’
2 hours -
JoyNews’ Clinton Yeboah honoured at 2023 Int’l Sports Media Awards in Spain
2 hours -
14 PWDs selected for maiden Africa Health Collaborative Medicine Counter Assistant training
3 hours -
Manchester United open to offers for nearly all of squad
3 hours -
Price of LPG per kilogramme constitutes 22% of taxes – LPG Marketers Association
5 hours -
Nigeria appoint Finidi George as new Super Eagles boss
5 hours -
Elevating Ghana’s creative industry: A blueprint for competing with Nigeria and South Africa
7 hours -
Poor finishing a problem for Asante Kotoko throughout the season – Prosper Ogum
7 hours -
Samini teams up with Francis Osei for ‘Sticks N Locks’ EP
7 hours -
Government should resource record labels – Seven Xavier
7 hours -
I need majority in parliament to successfully complete my term – Akufo-Addo pleads
7 hours -
Next NDC government will not recognise illegal contracts signed by current administration – Sammy Gyamfi
7 hours -
Premier League clubs vote in favour of spending cap plans
8 hours -
Nigeria’s fuel crisis brings businesses to a halt
8 hours