The economy of Ghana remains unstable – John Kwakye

The Director of Research at the Institute of Economic Affairs (IEA) Dr John Kwakye has told managers of the economy not to be quick in celebrating the gains made recently.

Dr Kwakye says the economy is still fragile despite the drop in inflation rate.

“Our economic managers shouldn’t be hasty to make uterrances like we have ‘tamed inflation,’ ‘stabilised the exchange rate,’ ‘turned the corner,’ etc. because the economy is still fragile, vulnerable, and fickle,” he wrote on his X platform.

His comments come at a time President Nana Addo Dankwa Akufo-Addo called on the Bank of Ghana and the Ministry of Finance to strengthen their partnership to sustain the gains.

The President said that the current economic challenges that Ghana faces require that every hand should be on deck.

By the grace of God, he said, the government has turned the corner relative to the challenges.

In a statement he presented during the end-of-year cocktail dinner organized by the BoG last week, the President said that the effective partnership between the BoG and the International Monetary Fund (IMF) in the $3 billion programme is yielding the right results.

“There is clear evidence that inflation is being contained, moving from 54 per cent in December 2022 to 26.4 per cent in November 2023,” he said.

“We are also witnessing sustained stability of the exchange rate. I am also encouraged by the many corporate governance measures put in place by the BoG to mitigate future bank failures and ensure that we have a strong banking sector to drive the agenda of transformation.

“Recent policy measures introduced by the BoG are commendable and in line with efforts to move Ghana to a situation beyond aid. I have also taken a keen interest in the bank’s role in the digitization of the economy. The architecture of our payment system has been transformed completely and financial inclusion has been deepened to ensure shared growth for all Ghanaians.

“All these make the BoG an institution of excellence, reflecting the recent international recognition of the central bank. The BoG has won the Central Bank of the Year awards two times with the governor, Dr Ernest Addison on one occasion being adjudged the central bank governor of the year,” the President said.

In conclusion, he added “I am aware this year has been challenging for the bank, but with the excellent leadership and the dedicated staff of the BoG, the bank has been able to surmount the difficulties and emerged even stronger. While I congratulate the bank for its achievements over the years, I want to stress that the current economic challenges require that every hand should be on deck. By the grace of God, we have turned the corner and I reiterate my call for stronger partnerships and a greater degree of policy coordination between the BoG and the Ministry of Finance.

“This call is for the bank within its remit of operational independence to play a pivotal role in helping to formulate and implement policies that will help usher in the economic transformation we all desire. In so doing, the bank should ignore the mischief of misguided elements and maintain its focus on executing its mandate.”