The Bank of Ghana’s robust independence has garnered commendation from the World Bank.
The World Bank highlighted the Central Bank’s critical role in successfully implementing policy reforms to curb inflation in the Ghanaian economy.
This was contained in the World Bank’s latest Country Policy and Institutional Assessment (CPIA) report, titled “CPIA Africa 2024: Structural Reforms for a Vibrant Private Sector.”
The CPIA report underscores the significant achievements of the Bank of Ghana in maintaining monetary stability and enhancing economic credibility.
It said the Bank’s independent stance has been instrumental in transitioning from managing global economic shocks to establishing stronger financial policies and transparency.
“The region’s strong performance across multiple measures of Central Bank independence is a testament to the Bank of Ghana’s effective strategies,” the report noted.
Under the stewardship of the Bank of Ghana, Ghana has witnessed a significant reduction in inflation. The central bank’s commitment to a tight monetary policy, including raising reserve ratios and halting monetary financing of the deficit, has been pivotal.
These measures have resulted in a remarkable decrease in year-over-year inflation, from 54% in December 2022 to 23% in December 2023. “Ghana’s reforms around central bank independence played a crucial role in this achievement,” the report emphasised.
The CPIA report also highlighted that the region’s average score for monetary and exchange rate policy improved to 3.4 in 2023, with Ghana being one of the notable countries showing significant progress.
In addition to monetary policy, the Bank of Ghana has been a driving force in enhancing fiscal transparency and responsibility.
It noted that the government’s commitment to reinstating its fiscal rule in the medium term and strengthening the independence of its Fiscal Council reflects the collaborative efforts to bolster economic stability. These initiatives aim to enhance the credibility of the council’s macro-fiscal assumptions and ensure compliance with the fiscal rule.
The CPIA, an annual diagnostic tool for countries eligible for financing from the International Development Association (IDA), highlights areas of policy reform and economic progress.
Andrew Dabalen, World Bank Chief Economist for Africa, noted, “The CPIA review offers a chance to identify areas of relative weakness and engage in a dialogue around policy reforms that can produce better development outcomes.”
Source: classfmonline
