Dr. Ernest Addison, the Governor of the Bank of Ghana (BoG), staunchly defended the central bank's unwavering support for the economy during the 2022 crisis.
According to him, the BoG merits applause from Ghanaians, not undue criticism.
Dr. Addison asserted that Ghanaians should appreciate the resilience of the Bank of Ghana, emphasizing that only a prudently run central bank with built buffers can effectively support an economy facing collapse.
“In the 2020 pandemic, the Central Bank supported the financing of the budget to protect lives and livelihoods. Again, in the 2022 economic and liquidity crisis, the Central Bank would not have acted differently but played its role as an automatic stabilizer to avoid pushing the economy to a tipping point which possibly could have spilled into social upheavals as was the case in Sri Lanka.
“It is very clear that only a Central Bank that has been prudently run, built buffers, and well positioned, can step in to support an economy from collapse. It is therefore most appropriate, I believe, to state that Ghanaians should rather applaud and commend the resilience of the Bank of Ghana.”
Dr. Addison also commended the central bank's pivotal role in preventing the Ghanaian economy from succumbing to the pressures of the crisis, cictinewsroom reported.
“It is important to remind ourselves, as players in the global economy, that the crisis that hit the Ghanaian economy in 2022 was like what pertained in many other frontier and emerging market economies, including Egypt, Argentina, Turkey, Kenya, Sri Lanka, and Pakistan, just to mention a few. These countries, except for Sri Lanka, had built policy buffers and the resilience of their key institutions provided the needed anchor to hold their economies until reform packages were introduced.”
He highlighted that the strong policy buffers built over time allowed the BoG to intervene and support the economy until the conclusion of the IMF program.
Dr Addison, speaking at the Governor’s Day organized by the Chartered Institute of Bankers, explained that, "The bank played a critical role to support the economy during the crisis period with distinction. It is very clear the bank’s role in supporting the economy through this crisis has not been fully understood and in some cases deliberately misinterpreted. The Bank came under severe attack across the media space, culminating in an organised demonstration against the institution.
“Ladies and Gentlemen, central banks all over the world have had to re-evaluate their mandate since the global financial crisis of 2007/2008 and have supported fiscal policy to play a countercyclical role in stabilizing economies.
“Consequently, central banking has never been the same. Before the financial crisis, the quintessential task of central banks was straightforward, keeping inflation within a tight range through the control of short-term," he added.
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Dr. Ernest Addison, BoG Governor