Dr Johnson Asiama
Johnson P. Asiama, Second Deputy Governor of the Bank of Ghana (BoG), has advised African Central Banks to develop a framework for comprehensive education so as to improve financial literacy across all sectors of the economy.
This, he said, would enhance market appreciation of monetary policy decisions and Central Bank actions for appropriate response.
Delivering the opening address of the Continental Seminar of the Association of African Central Banks (AACB) recently in Accra, Dr Asiama advised central bankers to also appreciate new communication trends and develop communication strategies to leverage existing media technology and build the confidence of market players.
The three-day seminar was themed: ‘Credible Communication Strategies for Central Banks in the Framework of Monetary Policy and Financial Stability.’
He further noted that as democratic processes take root alongside media pluralism and the explosion of social media, there was potential for Central Bank actions and inactions to be misrepresented and in the process erode the central bank’s reputation, as well as lower market and public confidence in monetary policy decisions.
“There is the need to build monetary policy credibility, especially in a number of African central banks to support monetary policy making,” he said, adding that efforts must be made to remove both technical and political constraints which were pervasive within the African central banking context.
“Some of these technical constraints include data unreliability and untimeliness with monetary policy decision or forecasts, over-optimistic policy objectives, and uncontrollability of policy instruments.
“Political constraints such as inadequate legislation to back the operational independence of the Central Bank also hinder policy credibility.”
Dr Asiama added that addressing such constraints would require financial and technical support to state institutions that generate the economic and financial data, and constitutional, legislative and operational reforms to strengthen monetary policy formulation.
samuel10gh@yahoo.com
By Samuel Boadi