World Bank report commends BoG's inflation-control efforts

The Office of the Chief Economist for the Africa Region of the World Bank has praised the Bank of Ghana's effective policies in curbing inflation, as stated in a report released in Accra on July 16, 2024.

The Country Policy and Institutional Assessment (CPIA) Africa report, which focuses on policy reforms in Sub-Saharan Africa, highlighted Ghana's dedication to enhancing the central bank's independence.

The report emphasized that Ghana's strategic reforms included implementing tight monetary policy measures, increasing reserve ratios, and launching a comprehensive fiscal reform program. These initiatives collectively led to a significant decrease in year-over-year inflation rates, dropping from 54 percent in December 2022 to 23 percent in December 2023.

During the report's launch in Accra, officials highlighted the crucial role of the Bank of Ghana's monetary policy tightening in achieving a remarkable 30 percentage point drop in inflation within a year.

At an event to introduce the government’s SME Growth and Opportunity Programme in Accra on Tuesday July 16, 2024, the Governor of the Bank of Ghana, Dr. Ernest Addison reaffirmed the Central Bank's commitment to further stabilizing the economy.

He pointed out recent milestones achieved by the apex bank, such as the successful completion of the Second Review of the IMF programme, which recognized Ghana's progress in economic stabilization despite lingering external and domestic risks.

“The Bank of Ghana has stepped up efforts to bring inflation under control, eliminate monetary financing of budget, and rebuild foreign currency buffers”.

“Just recently, the country successfully went through completion of the Second Review of the IMF programme by the IMF Board. The Board reaffirmed the generally strong program performance and clear signs of emerging economic stabilisation,” he mentioned.

Dr. Addison also stressed the importance of steadfast reform implementation to solidify macroeconomic stability, ensure sustainable growth, and reduce poverty. He emphasized that the Central Bank will remain vigilant in monitoring inflation trends closely

“Noting substantial downside external and domestic risks, they [IMF] underscored the importance of steadfast reform implementation to entrench macroeconomic stability and debt sustainability while fostering sustained growth and poverty reduction. Sustaining macroeconomic stability requires the Bank of Ghana to continue to ensure that the BoG keeps an eye on inflation”, the Governor noted.

The World Bank's annual CPIA report serves as a valuable resource for policymakers and international investors, providing insights into policy developments in countries eligible for International Development Association (IDA) assistance.

MA/NOQ