Dr. Ernest Addison
The Governor of the Bank of Ghana, Dr. Ernest Addison, has emphasized the need for effective macroeconomic policies to address the current global economic challenges.
Speaking at the opening of the WAIFEM/IMF Regional Course on Financial Programming and Policies, Dr. Addison highlighted the importance of capacity building in macroeconomic management.
The course, attended by representatives from central banks, ministries of finance, and economic planning from across the sub-region, aims to improve participants’ ability to diagnose macroeconomic imbalances and design policies to correct them.
Dr. Addison noted that the global economy is recovering from successive shocks, including the COVID-19 pandemic and the Russia-Ukraine conflict, which disrupted growth and pushed inflation to unprecedented levels.
He cautioned that despite the easing of global financial conditions, inflation remains above targets in many countries, and upside risks persist.
In the sub-region, Dr. Addison observed that countries face significant challenges, including funding squeeze, elevated geopolitical risks, and heightened security concerns.
He cited the International Monetary Fund’s (IMF) Regional Economic Outlook, which projects growth in Sub-Saharan Africa to rise from 3.4 percent in 2023 to 3.7 percent in 2024.
However, Dr. Addison warned that the expected rebound is subject to significant risks and uncertainty, including faltering growth in major economies, elevated geopolitical risks, and heightened security concerns.
To address these challenges, Dr. Addison emphasized the need for policy adjustments to rebuild fiscal buffers and avoid a systemic debt crisis.
He endorsed the IMF’s recommendation for revenue-based adjustments, citing the region’s tax gap estimated at around 5 percent of GDP.
In Ghana’s specific situation, Dr. Addison noted that the external shocks amplified pre-existing vulnerabilities, leading to a downgrade of the country’s sovereign rating, loss of international market access, and liquidity crisis.
He highlighted the government’s recourse to a Fund-supported program to restore macroeconomic stability and implement structural reforms.
Dr. Addison outlined the Bank of Ghana’s measures to ensure price, exchange rate, and financial stability, including maintaining an appropriately tight monetary policy stance, enhancing exchange rate flexibility, and providing liquidity support to banks.
The governor concluded by emphasizing the relevance and timeliness of the regional course, stressing the need for public servants in key socio-economic management institutions to be well-grounded in modern techniques of macroeconomic and financial analysis.
The WAIFEM/IMF Regional Course on Financial Programming and Policies is expected to run for several weeks, providing participants with hands-on training in macroeconomic modeling, forecasting, and policy analysis.
-BY Daniel Bampoe