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Price stability in Ghana’s economy is a key focus of the central bank, Dr Ernest Addison, Governor of the Bank of Ghana, has said.
According to him, price stability offers a strong foundation to facilitate growth and development, hence the need to focus on that aspect of the economy.
Addressing members of the Journalists for Business Advocacy (JBA) at a workshop in financial reporting in Accra on Tuesday, 7 November, Dr Addison said: “All over the world, business and financial journalists are increasingly becoming an important fixture of the monetary policy communications process, acting as channels for major policy announcements to financial markets and to the public.”
He said: “Ghana is no different, therefore, the chosen theme for this training workshop is ‘Monetary Policy Tools for Economic Development’. We think it is timely and appropriate and will offer the participants with a deeper understanding of monetary policy’s role in economic development.”
Dr Addison added: “In the new legal dispensation, the primary objective of the bank is to maintain price stability independent of instructions from government or any other authority. This has refocused the central bank on the major task of inflation control and indirectly away from developmental activities which characterised the bank’s operations in the past.
To accomplish this, Dr Addison said: “Act 612 mandated the formation of the Monetary Policy Committee responsible for formulating monetary policy which has brought transparency to the central bank’s operations and its communications with the public.”
“The new statutory mandate of the bank is firmly rooted in a resurgence of public interest in economic policies and awareness of how much economic stability contributes to raising the standards of living of its people,” he noted.
Speaking about the importance of price stability to economic development, the central bank governor said “price stability offers the strong foundation to facilitate growth and development; price stability, and in this case achieving and maintaining a low and stable inflation regime, reduces uncertainty and helps economic agents to extract information from relative prices, thus, leading to a more efficient resource allocation and higher growth.”
“By controlling inflation through effective monetary policy formulation, the Bank of Ghana makes the best contribution” towards sustaining “long-term growth and economic development in the country,” Dr Addison said.
Meanwhile, Ecobank Ghana has reiterated its commitment towards strengthening the Small- and Medium-Scale Enterprise (SME) sector in the Ghanaian economy.
Morgan Asiedu, Ecobank’s Director of Legal and Human Resource, told participants that the “SME sector promotes national development.” “The SME sector contributes over 60% of total employment, 40% GDP in developing economies.”
He, however, mentioned that the sector is bedeviled with some challenges such as “lack of access to credit and high cost of credit”, which need some attention.