Ghana’s macroeconomic landscape is beginning to show signs of stabilization, but significant risks still loom, warns Dr. Johnson Asiama, Governor of the Bank of Ghana (BoG). Speaking at the 124th Monetary Policy Committee (MPC) meeting in Accra, Dr. Asiama provided an overview of the nation’s economic outlook, balancing cautious optimism with a call for vigilance.
Inflation Outlook and Risks
While inflation has dropped to 21.2% as of April 2025—marking progress compared to recent years—it remains well above the central bank’s medium-term target of 8 ± 2% and even the upper tolerance limit of 19%. Dr. Asiama underscored several vulnerabilities threatening Ghana’s inflation trajectory, including:
Second-round effects: Persistent price increases in goods and services could lead to higher wages and further inflationary pressures.
Food supply constraints: Challenges in food production, especially in northern Ghana and the Sahel region, are exacerbating price volatility.
Global price shocks: The unpredictability of commodity markets, driven by geopolitical tensions and trade disruptions, poses additional risks.
Global Trends and Local Implications
Dr. Asiama noted that Ghana’s economy does not operate in isolation. Global uncertainties, such as tariff disputes led by the United States and shifting trade dynamics, could have cascading effects on Ghana’s exchange rates, commodity prices, and capital inflows. “These factors contribute to heightened market uncertainty, particularly in emerging economies like Ghana,” he stated.
Policy and Strategic Focus
The BoG’s MPC is evaluating whether current monetary policies are sufficient to drive disinflation without stifling Ghana’s fragile economic growth. Dr. Asiama highlighted key areas under review, including:
Sustaining the recent exchange rate appreciation.
Building on renewed market confidence.
Strengthening the medium-term outlook for inflation.
He emphasized the delicate balance required to stabilize the economy while fostering growth and maintaining investor confidence.
Recent Economic Milestones
Despite the challenges, Ghana has achieved notable milestones in its economic recovery journey:
IMF Support: The nation secured a Staff-Level Agreement with the International Monetary Fund (IMF) under the Fourth Review of the Extended Credit Facility (ECF) Programme.
Sovereign Rating Upgrade: Standards and Poors upgraded Ghana’s sovereign credit rating from selective default to CCC+, reflecting improved fiscal discipline.
Strengthened Trade Balance: External reserves have grown, and the trade balance has improved, bolstering economic resilience.
Boost in Confidence: Consumer and business confidence indices continue to rise, indicating optimism among key economic players.
A Cautious Path Forward
Dr. Asiama concluded by reaffirming the BoG’s commitment to proactive policy measures aimed at navigating the complexities of the current economic environment. “While progress has been made, we must remain vigilant and agile to address emerging risks that could derail the recovery process,” he stated.
Ghana’s journey toward sustained economic stability is far from over, but the Governor’s remarks reflect a determined effort to build on early successes while mitigating risks.
Story by: Mercy Addai Turkson #ahotoronline.com
