We need to build confidence to calm financial markets – BoG

Dr Maxwell Opoku-Afari, 1st Deputy Governor of the Bank of Ghana

The Bank of Ghana reiterated the need to build confidence to calm financial markets and avoid disorderly reactions in these times of heightened uncertainty.

According to the Central Bank, these conditions and the impact on the Ghanaian economy, particularly on inflation, the exchange rate, the impact on the country’s balance of payments led Ghana to approach the International Monetary Fund ( IMF) for some form of cooperation to resolve the current imbalances and challenges facing the economy.

Speaking at a workshop on financial literacy in the Northern Zone of Ghana for media professionals, the Senior Deputy Governor of the Bank of Ghana, Dr Maxwell Opoku-Afari, said there was a need to make every effort to begin to restore confidence in the economy.

“At this stage, we must make every effort to begin to restore confidence. My remarks this morning will therefore focus on: the current state of the Ghanaian economy and the policies being pursued; the macroeconomic outlook and future policies; and the role of the media in helping to restore confidence in the economy”.

He pointed out that despite the sizeable growth rate of the Ghanaian economy, post-COVID-19, significant downside risks remain to the outlook, including further headwinds from the Russian-Ukrainian war and the potential outbreak of new variants of the Covid-19 pandemic.

This, he said, resulted in a downward revision of the growth target to 3.7%, from the original target of 5.6%.

“As we all know, significant challenges remain with the execution of the 2022 budget as revenue mobilization has not kept pace with projections, creating financing challenges. In the absence of international market access of capital and given domestic financing constraints, the central bank overdraft has helped close the financing gap, as evidenced by the mid-year fiscal review.Fiscal challenges have also heightened sustainability concerns debt.

He said that “ongoing policy discussions with the IMF are expected to help address underlying macroeconomic challenges, restore fiscal and debt sustainability, and re-anchor a sustainable balance of payments.”

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