A report produced by the Office of the Chief Economist for the Africa Region of the World Bank, dated June 2024, has affirmed the effectiveness of the Bank of Ghana’s policies in controlling inflation.
The Country Policy and Institutional Assessment (CPIA) Africa report, which examined reforms across policy areas in Sub-Saharan Africa, noted that “Ghana’s authorities committed to policy reforms to strengthen the central bank’s independence.”
The report highlighted that “this commitment contributed to pursuing tight monetary policy, raising reserve ratios, and implementing a fiscal reform program that helped reduce year-over-year inflation from 54 percent in December 2022 to 23 percent in December 2023.” The report was launched in Accra, Ghana, on July 16, 2024.
The report provides valuable insights and best practices for policymakers and international investors, following the World Bank’s annual Country Policy and Institutional Assessment (CPIA) of countries eligible for International Development Association (IDA) assistance.
It supports the long-held view of analysts and economists that the central bank’s tightening of monetary policy has significantly contributed to the more than 30 percentage point drop in inflation from December 2022 to the present.
During the SME Growth and Opportunity Summit organized by the Ministry of Finance in Accra on July 16, 2024, the Governor of the Bank of Ghana, Dr. Ernest Addison, stated that “the Bank of Ghana has intensified efforts to control inflation, eliminate monetary financing of the budget, and rebuild foreign currency reserves.”
“Just last week, the country successfully completed the Second Review of the IMF program by the IMF Board. The Board recognized the generally strong program performance and clear signs of emerging economic stabilization.
However, they noted significant external and domestic risks and emphasized the importance of steadfast reform implementation to ensure macroeconomic stability and debt sustainability while promoting sustained growth and poverty reduction.
To sustain macroeconomic stability, the Bank of Ghana must continue to closely monitor inflation,” the Governor stated.
